Transcript
00:00:00 The following is a conversation with Brian Armstrong,
00:00:02 cofounder and CEO of Coinbase,
00:00:05 the largest cryptocurrency exchange platform
00:00:07 with 98 million users in 100 countries,
00:00:11 listing Bitcoin, Ethereum, Cardano,
00:00:13 and over 100 popular cryptocurrencies.
00:00:17 I recorded this conversation with Brian
00:00:19 before this week’s SEC probe
00:00:21 into whether some of the crypto listings are securities
00:00:25 and thus need to be regulated as such.
00:00:27 As always, with conversations that involve cryptocurrency,
00:00:31 I try to make it timeless
00:00:33 so that the price soaring high or crashing down low
00:00:37 doesn’t distract from the fundamental technological,
00:00:40 economic, social, and philosophical ideas
00:00:42 underlying this new form of money, energy, and information.
00:00:47 Our world runs on money, the exchange and store of value,
00:00:52 and cryptocurrency seeks to build the next chapter
00:00:55 of how money works and what it can do.
00:00:58 Coinbase and Brian are trying to do this
00:01:01 by working together with regulators and governments,
00:01:04 which is a long and difficult road.
00:01:06 Bureaucracies resist change, for better and for worse.
00:01:11 The latest SEC probe is a good representation of this.
00:01:14 It is a serious attempt to limit fraud,
00:01:17 but one that also runs the risk of limiting innovation
00:01:20 and limiting financial freedom of individuals.
00:01:24 This is a complicated mess,
00:01:26 and I applaud everyone involved
00:01:27 for trying to work through it.
00:01:29 I hope in the end, the interest of the individual wins.
00:01:33 Decentralization, after all, is a hedge
00:01:35 against the corrupting nature of centralized power.
00:01:39 This is the Lex Friedman podcast.
00:01:41 To support it, please check out our sponsors
00:01:43 in the description.
00:01:44 And now, dear friends, here’s Brian Armstrong.
00:01:49 Let’s start with the fact that you’re a programmer.
00:01:51 What was the first program you’ve ever written?
00:01:53 Or the first one that you remember?
00:01:55 The first memory I have of programming
00:01:57 was probably in middle school.
00:01:59 And I remember it was recess,
00:02:01 and they had this time period where you could read books,
00:02:04 and the other kids were reading comic books and stuff.
00:02:07 And for some reason, I had gotten into this idea
00:02:10 that I wanted to get into computers,
00:02:11 and I was playing with computers at home.
00:02:13 And so I got this book, I think from the library,
00:02:15 it was called How to Learn Java in 30 Days.
00:02:19 So I was reading this book at the recess,
00:02:24 and I didn’t understand anything.
00:02:25 And I remember I went home,
00:02:26 and I tried to get this thing working.
00:02:29 And if you’ve ever written a Java program,
00:02:31 the first lines are public static void main string args
00:02:35 or whatever.
00:02:35 And it’s so foreign, and it’s so difficult to get started.
00:02:39 And so I was kind of frustrated.
00:02:40 I was like, I don’t understand anything
00:02:41 that’s happening in this book.
00:02:43 So the first thing I wrote was probably just
00:02:45 a Hello World app in Java.
00:02:48 But I felt like I was so confused
00:02:51 about what was actually happening
00:02:52 that I later learned a bit of PHP.
00:02:55 And PHP was like more fun for me
00:02:57 because it was like, oh, just print out what you want.
00:03:00 It didn’t have all this complexity around it.
00:03:02 So then I got more into PHP,
00:03:04 I started building like some simple websites,
00:03:06 I think learned some HTML.
00:03:09 So I think that was my introduction to programming,
00:03:12 at least the very beginning part.
00:03:13 Yeah, you know, Java has a lot of,
00:03:18 out of all the Hello Worlds it could possibly write,
00:03:20 Java is the one where I think it’s the longest.
00:03:23 Yeah.
00:03:24 Which is quite interesting
00:03:25 because Java is often at least for a long time
00:03:27 was used as the primary programming language
00:03:29 to teach people how to program,
00:03:30 or at least about object oriented programming.
00:03:32 I think most universities have now switched
00:03:35 and high school switched to Python.
00:03:37 I’m not sure if that’s the case.
00:03:38 Probably better.
00:03:39 It’s easier to learn.
00:03:40 It lowers the, it makes it less scary.
00:03:42 It was like less of a hurdle.
00:03:43 And certainly none of them use PHP.
00:03:45 I love PHP and I feel like it’s a dirty secret.
00:03:48 I have to keep private to myself.
00:03:51 Like it’s somebody I’m seeing on the side
00:03:52 or something like that,
00:03:53 because it’s just not a respected programming language
00:03:56 because I think there’s so many ways
00:03:57 you can write poor code with PHP,
00:04:00 which is why it’s not respected.
00:04:02 Yeah, it’s a scripting language more so,
00:04:03 although of course Facebook built like a huge stack
00:04:06 on top of an invaluable company,
00:04:07 but I still love Ruby to this day.
00:04:10 Ruby is probably my favorite language.
00:04:12 Python’s great too,
00:04:13 but I just love the idea behind Ruby that it’s like,
00:04:16 let’s make it easier for the human,
00:04:18 harder for the computer,
00:04:19 and make it a joy to be expressive and all these things.
00:04:22 So I was never the best computer scientist,
00:04:24 but I was a good hacker.
00:04:26 I could rapidly prototype products
00:04:28 and using languages like Ruby.
00:04:30 Do a lot of computer science programs still use like Lisp
00:04:33 and Scheme and things like that?
00:04:35 No, they do for, that’s like, that’s if you’re hardcore.
00:04:39 If you’re legit, you’re gonna do
00:04:40 some of the functional languages.
00:04:42 I think there’s a few others that popped up,
00:04:44 but Lisp is a distant memory for a lot of people.
00:04:48 That’s like somebody has to like,
00:04:49 you go to library, you dust off the book,
00:04:53 but Scheme a little bit.
00:04:55 I think if you’re starting,
00:04:57 I mean, there’s courses about languages themselves,
00:04:59 like programming languages.
00:05:01 Lisp might be one of those,
00:05:03 you know how there’s languages that nobody uses anymore,
00:05:05 like ancient languages?
00:05:06 You might have to go to school in that same way
00:05:09 for programming languages.
00:05:10 Back in the day, we used to use parentheses.
00:05:12 I of course still use Emacs as the editor
00:05:15 for most things that I do.
00:05:17 And Emacs is, a lot of the customization you can do
00:05:22 is in Lisp and that’s the language probably
00:05:24 when I first really fell in love with programming is Lisp.
00:05:30 Because for a long time throughout the earlier history
00:05:34 of artificial intelligence,
00:05:35 Lisp was the primary language,
00:05:36 but it still had a life in the 90s and the aughts
00:05:41 where some people would use it.
00:05:43 It’s such a beautiful functional language,
00:05:46 but it just somehow didn’t pick up.
00:05:51 That said, I should say sort of push back,
00:05:53 PHP, I feel like it’s still true
00:05:55 that most of the web runs on PHP.
00:05:58 Most of the backend is still PHP.
00:06:02 So if you look at, you know,
00:06:03 it’s like the stuff that people don’t talk about.
00:06:05 It’s like what runs most systems in the world?
00:06:08 What runs the most backend?
00:06:11 What runs most front end?
00:06:12 JavaScript, you know, HTML.
00:06:15 The Stack Exchange surveys show JavaScript
00:06:18 is the most popular language in the world, I think, right?
00:06:20 Oh yeah, in terms of programmers and numbers of, I wonder.
00:06:25 By survey of number of programmers on Stack Overflow.
00:06:28 Oh yeah, but that’s also the cutting edge, right?
00:06:31 Those are the people that are just like excitedly
00:06:33 writing code.
00:06:34 I wonder if there’s people that are just like
00:06:37 maintaining gigantic code bases.
00:06:40 Yeah, I feel like the amount of Java out there
00:06:43 just running industrial systems has gotta be enormous.
00:06:46 And then of course in the banking industry, finance,
00:06:49 it’s like even older stuff, Cobalt and whatnot, but.
00:06:52 I’ve been actually looking for somebody to interview
00:06:57 who represents Cobalt and Fortran.
00:07:00 Like who’s the figure still there that holds the flag?
00:07:05 I did, you know, with Java, founder of Java,
00:07:07 creator of Java, creator of Python, creator of C++,
00:07:11 but nobody wants to hold the flag for Cobalt and Fortran,
00:07:14 even though some of the most important systems in the world
00:07:17 still run on those.
00:07:20 Like power systems and infrastructure systems,
00:07:23 which is fascinating, and ATMs and stuff like that.
00:07:27 Like a lot of stuff that we rely on,
00:07:30 it just works, and the reason we don’t change it
00:07:32 is because it works well.
00:07:33 It was written in languages that people don’t use anymore.
00:07:36 Yeah, that’d be a cool series of interviews.
00:07:39 Get the stuff that’s like tech that was invented
00:07:42 40, 50 years ago, but still is being used widely.
00:07:45 I mean Emacs is an example of that.
00:07:47 Let me ask the big question of
00:07:50 what are cryptocurrency exchanges and what’s Coinbase?
00:07:54 How does it work?
00:07:55 Before, I’ll ask even bigger questions,
00:07:57 but it’s just a nice kind of palate cleansing question
00:08:00 of what is Coinbase?
00:08:03 Coinbase is a cryptocurrency exchange brokerage custodian.
00:08:07 Basically, we’re the primary financial account for people
00:08:11 in the crypto economy, how they buy crypto,
00:08:13 how they store it, how they use it increasingly
00:08:15 in different ways.
00:08:16 We can talk about that.
00:08:18 So yeah, we want to be the way that a billion people
00:08:20 hopefully access the open financial system globally.
00:08:23 How does it work?
00:08:25 What’s cryptocurrency?
00:08:29 There’s Bitcoin, there’s Ethereum.
00:08:34 What does it mean to be an exchange?
00:08:37 What does it mean to store?
00:08:39 What does it mean to transact?
00:08:40 How does it, what does Coinbase actually do?
00:08:43 Okay, so basically in any given market,
00:08:46 there’s some people who want to buy,
00:08:47 some people who want to sell,
00:08:49 and you keep an order book of all those prices.
00:08:53 And then if someone’s willing to buy
00:08:56 for more than the lowest price someone’s willing to sell,
00:08:59 then you get a trade to execute.
00:09:02 That’s kind of how an exchange works underneath.
00:09:04 And a brokerage is kind of simpler than that even.
00:09:06 You don’t have to know,
00:09:08 look at the whole order book and everything,
00:09:09 but you just go in there and you say,
00:09:10 I want to buy a hundred dollars of Bitcoin
00:09:12 or whatever cryptocurrency.
00:09:14 You get a quote, and if you like it, you can hit accept.
00:09:16 And the core things that we do to make all that
00:09:19 kind of just work, make it seamless,
00:09:21 it sounds simple on the surface,
00:09:23 is we have to do payment integrations
00:09:26 in a variety of places around the world
00:09:27 to make it easy for people to get fiat currency
00:09:29 into this ecosystem.
00:09:31 We have to do work on cybersecurity a lot.
00:09:33 There’s lots of hackers out there
00:09:35 trying to break into our systems and steal crypto
00:09:37 or to put stolen credit cards and bank accounts
00:09:39 and things like that into these systems.
00:09:42 We have to integrate with the blockchains themselves,
00:09:45 which are periodically getting updated
00:09:48 and having various airdrops and all kinds of things.
00:09:51 So we’re integrated with lots of different blockchains.
00:09:53 And then we have to store the crypto
00:09:54 that people buy securely as well.
00:09:57 So crypto is kind of like storing,
00:09:59 you store the private keys essentially.
00:10:00 And we’ve invented a lot of cool technology
00:10:03 about how to do that securely
00:10:04 that helps me sleep at night
00:10:06 as one of the largest crypto custodians out there.
00:10:10 So those are some of the pieces that had to come together
00:10:12 to get that early simple buy sell experience to work.
00:10:16 And yeah, I mean, Coinbase actually has
00:10:18 a lot of different products now.
00:10:20 So we have like an institutional product.
00:10:21 We have Coinbase Commerce,
00:10:23 which is like merchant payments, like Stripe for crypto.
00:10:26 We’ve got a self custodial wallet,
00:10:27 which we can talk about.
00:10:28 There’s all kinds of cool applications
00:10:30 people are building with web3
00:10:31 and they can access it through that.
00:10:32 We just launched an NFT product.
00:10:36 I can go on down the list.
00:10:37 So we’re sort of like a portfolio of crypto products now.
00:10:39 We’re big enough where we can do multiple things.
00:10:42 But yeah, the core thing we got started with
00:10:43 and still the majority of our revenue today
00:10:45 is people just wanna come in and buy and sell some crypto.
00:10:48 And we help them do that and make it simple
00:10:49 and easy to use.
00:10:51 And I’ll ask you about wallet, NFT is about,
00:10:53 what is it called?
00:10:54 The Stripe type?
00:10:55 Coinbase Commerce.
00:10:56 Coinbase Commerce.
00:10:58 I’ll ask you about all that.
00:10:59 But order books in exchange,
00:11:01 what’s the difference between that and stocks, for example,
00:11:04 which there’s also order books.
00:11:06 Yes, I mean, stocks trade through order books too.
00:11:08 So do commodities.
00:11:09 There’s all similar type of situation.
00:11:12 So when I wanna buy one Bitcoin and I see Coinbase,
00:11:15 say the price of that Bitcoin is say $40,000
00:11:20 and I press buy, what happens?
00:11:25 Yeah, okay.
00:11:26 So you’ve gotten a lot,
00:11:29 when you press the button on your keyboard,
00:11:30 like an electrical signal goes up the wire
00:11:32 on your keyboard.
00:11:33 No, we won’t cut out the level.
00:11:35 That’s also important, the timing, right?
00:11:36 Cause it’s not price fixed.
00:11:38 Yeah, that’s true.
00:11:39 It’s giving you a quote, right?
00:11:42 There’s a whole concept of like slippage.
00:11:44 And like by the time the quote is executed,
00:11:48 if the price has moved too much, like we may reject it.
00:11:50 And there’s various things like that.
00:11:52 But how do, I mean, what’s the simple version I can give you?
00:11:55 So we’ll basically check the order book, give you a quote.
00:11:59 It’s good for some period of time
00:12:00 or for some amount of slippage.
00:12:02 And then what’s happening is we’re initiating a debit
00:12:06 to your payment method, whether that’s a credit card
00:12:08 or a bank account, or you’re storing dollars or euros
00:12:11 or something on our platform,
00:12:12 there’s various payment methods.
00:12:13 So we’re basically debiting that.
00:12:15 And then we’re crediting you the crypto
00:12:17 and we’re taking a fee for it too.
00:12:19 So that’s fundamentally what’s happening underneath.
00:12:24 And then there’s just some interesting slippage.
00:12:26 How do you calculate how much slippage is allowed?
00:12:30 Like how do you know these things?
00:12:33 Cause order books are fascinating.
00:12:36 The dynamics of that is pretty interesting.
00:12:39 The little I know about it.
00:12:40 Yeah, so there’s a lot of people like traders
00:12:43 who get super into this and like high frequency traders
00:12:46 and arbitrage and all kinds of interesting topics.
00:12:48 Flash Boys was like an interesting book
00:12:49 on this whole thing.
00:12:50 You want like access to information the fastest,
00:12:53 sometimes even putting your thing in the data center
00:12:56 right next to the thing.
00:12:58 We don’t allow that colo stuff
00:12:59 cause we want it to be more democratized.
00:13:03 But basically you give a,
00:13:05 let’s say we wanted to just keep it math simple.
00:13:07 We want to charge a 1% fee.
00:13:08 So if you’re buying $100 of Bitcoin
00:13:11 and we’ll charge you $101,
00:13:13 we’ve presented you the amount of Bitcoin
00:13:14 you’re going to get for the $100.
00:13:16 Now let’s say 10 seconds later you hit accept.
00:13:18 We go to fill the order.
00:13:21 So it’s going to be some error bound
00:13:23 around that 1% fee, right?
00:13:25 And if we think we’re actually losing money on the trade,
00:13:27 I think we’ll often reject it.
00:13:29 So some part of the fee,
00:13:31 the slippage is incorporated into that,
00:13:35 averaged over a large number of people.
00:13:38 Just, it’s fascinating.
00:13:39 Cause like even just like that little detail
00:13:41 probably requires a lot of experimentation.
00:13:44 Yeah.
00:13:45 And it’s kind of like a giant bug bounty out there
00:13:46 because if you get it wrong,
00:13:48 there’s people who are going to arbitrage that.
00:13:50 And we’ve had people sort of pen test our systems
00:13:53 in a really creative ways where like,
00:13:58 they’ll just fire like programmatically with APIs,
00:14:01 they’ll fire off like a million different quotes
00:14:03 and look for one of them that’s out of bounds
00:14:05 and then actually take that money right there.
00:14:07 And we get people doing all kinds of crazy stuff.
00:14:10 So how do you protect against that?
00:14:12 How do you protect?
00:14:13 So we’ll talk about cybersecurity in interesting ways,
00:14:15 but there’s a lot of clever people
00:14:18 trying to do clever things to earn,
00:14:20 not even just to break into the system,
00:14:22 but to earn an edge of some kind in the system.
00:14:26 How do you stay one step ahead?
00:14:28 There’s no silver bullet,
00:14:29 it’s a bunch of lead bullets, right?
00:14:30 So it’s like, you know, one thing we do is
00:14:34 we just have good test suites, right?
00:14:36 So you’re testing every piece of code that goes out,
00:14:38 that’s like just common good best practice,
00:14:40 but it’s particularly important in financial services.
00:14:43 Another thing we do is we hire third party firms
00:14:45 to try to audit this stuff and break in.
00:14:48 Another one we do is we have a bug bounty program.
00:14:51 So we basically pay white hat hackers to find this stuff
00:14:55 before the black hats do.
00:14:56 And we’ve paid out lots of good bug bounties.
00:14:59 So, you know, try all the above.
00:15:02 And occasionally you don’t get it right
00:15:03 and you lose some money and then you fix it
00:15:05 and you keep going, so yeah.
00:15:07 Let’s talk about cybersecurity a little bit more.
00:15:10 You mentioned using stolen bank accounts.
00:15:13 So that’s another one, that’s another interesting one.
00:15:15 How do you protect against that?
00:15:17 Okay, so fraud prevention, yeah, is a big topic.
00:15:20 So one of the, there’s a lot of things people do,
00:15:23 but one of the things they do
00:15:25 is that you use machine learning, right?
00:15:28 So you look at hundreds.
00:15:29 To protect or to attack?
00:15:30 To protect against it.
00:15:32 So what you want to do is kind of build up
00:15:35 a labeled data set of all the different people
00:15:39 who have turned out to be fraudulent and good actors,
00:15:42 and hopefully collect as much data as you can.
00:15:44 And then, you know, you might feed hundreds
00:15:45 or thousands of these factors
00:15:47 into your machine learning model
00:15:49 and it’ll come back with a risk score.
00:15:51 So, you know, an example of like the kinds of factors
00:15:54 people create or put in there, you know,
00:15:56 obviously I don’t want to disclose too many of them
00:15:57 because it’s a cat and mouse game,
00:15:59 but just kind of, I don’t know,
00:16:01 relatively well known stuff might be.
00:16:03 You know, you have device fingerprints, right?
00:16:06 So like, what kind of device are you on
00:16:08 and what fonts do you have installed?
00:16:10 A lot of people who are farming lots of these accounts,
00:16:12 they’re using emulators and like virtual machines and stuff.
00:16:15 They’re not like, you know,
00:16:16 an average person on that device.
00:16:19 And then you’ll see sometimes like,
00:16:21 one of my favorite metrics we track for this
00:16:23 was called like improbable travel velocity.
00:16:26 So we would, we’re tracking people’s IPS, right?
00:16:28 And you might see someone who was one day in Austin, Texas
00:16:33 and then like an hour later they were in London or something.
00:16:36 It’s like, well, that’s very improbable.
00:16:37 I mean, sometimes people are using VPNs.
00:16:39 So you gotta be careful with that
00:16:40 because like there’s legitimate people who use VPNs too.
00:16:42 But if it’s not possible for them to have gotten on a plane
00:16:46 and gotten there that quickly,
00:16:47 then that’s usually they’re like spoofing a device or IP.
00:16:50 Sometimes those are interesting factors.
00:16:52 But yeah, if you feed enough of these in, you will,
00:16:56 oh, another fun one is like, you know,
00:16:59 real users will type their credit card
00:17:01 like one number at a time.
00:17:03 Scammers have a list of them
00:17:05 and they’ll just paste in a whole number.
00:17:08 So you can look at like the number of milliseconds
00:17:10 between keystrokes.
00:17:11 Like there’s all kinds of stuff people have come up with.
00:17:13 And even for travel velocity,
00:17:15 you could probably incorporate VPNs too
00:17:17 because there’s probably a travel velocity
00:17:21 for VPN switching too that’s human like.
00:17:24 Like if you’re using legitimately VPN for something else,
00:17:27 that might be, there’s like legitimate uses too.
00:17:31 Actually, you know, I feel embarrassed
00:17:32 that I don’t know this, probably should.
00:17:34 But the, I’m not a robot.
00:17:37 Capture thing. Capture thing.
00:17:39 Yeah.
00:17:40 So that probably works in the same way.
00:17:42 Like how do you move your mouse maybe
00:17:46 or how the dynamics of the clicking.
00:17:48 Totally.
00:17:49 But how does that even work that well then?
00:17:51 And why can’t it be fake?
00:17:52 I need to look into this.
00:17:53 Cause it’s such a trivial capture.
00:17:56 It feels like it should be very crackable.
00:17:58 And yet a lot of high security places use that.
00:18:02 Yeah.
00:18:03 It’s really interesting.
00:18:04 It’s another cat and mouse game.
00:18:04 So I think they’ve, yeah,
00:18:05 but it’s using a lot of similar signals
00:18:07 like mouse movements, keystrokes.
00:18:10 And then obviously all the stuff that comes over
00:18:12 the wire with your browser.
00:18:14 So like what operating system, what fonts,
00:18:17 what headers are being sent over.
00:18:18 And there’s actually, there’s an old website.
00:18:21 I can’t remember what it’s called.
00:18:22 It was kind of like Panoptik Click
00:18:24 or Panopticon or something.
00:18:25 But it basically was like a proof of concept site
00:18:27 that they would just show you all the data
00:18:30 that was kind of getting sent over with your request.
00:18:33 And like say that there’s only one person in the world
00:18:36 who has this exact set of data.
00:18:37 It’s you.
00:18:38 And so it’s almost like a workaround,
00:18:41 a clever workaround to track somebody,
00:18:43 make identify a unique person,
00:18:45 even if like there wasn’t a cookie involved or something.
00:18:48 Yeah, this is a fascinating world
00:18:50 where you can’t see anybody here in the dark
00:18:52 and yet you have a lot of signal
00:18:54 and you have to figure out who’s a real person, who’s not.
00:18:56 Who’s a robot, who’s not.
00:18:58 Let me step back.
00:18:59 We’re gonna jump around all over the place.
00:19:00 Let me step back.
00:19:01 That’s why I like your interviews.
00:19:02 You get into like technical topics.
00:19:05 So just let’s use Bitcoin as a measure of time.
00:19:09 You started Coinbase when Bitcoin was $10.
00:19:14 And you just mentioned an incredible system
00:19:17 with security, with transactions.
00:19:19 Everything is thought through.
00:19:20 There’s a lot going on.
00:19:21 But what was version one back in those early days,
00:19:25 the first prototype of Coinbase?
00:19:26 What did that look like?
00:19:28 Like what did it take to write it,
00:19:31 to think through it and make it work enough
00:19:35 to at least make you believe that it’s gonna work?
00:19:38 Well, I definitely didn’t know if it was gonna work.
00:19:40 I mean, it was kind of,
00:19:41 I felt like I was just following my gut.
00:19:44 So, I mean, I was working at Airbnb.
00:19:47 I was a software engineer there, project manager.
00:19:50 I was working on some fraud prevention stuff, for instance.
00:19:52 And I read the Bitcoin white paper
00:19:55 in kind of December of 2010.
00:19:57 I started going to some Bitcoin meetups in the Bay Area,
00:20:01 met lots of interesting people there,
00:20:02 like crazy people, anarchists,
00:20:04 really brilliant people, all the above.
00:20:06 And so I started nights and weekends
00:20:09 trying to put together a prototype.
00:20:11 And my initial thought was,
00:20:13 well, SMTP is a protocol that runs email.
00:20:16 And Git is a protocol for version control
00:20:21 that people made like Gmail and GitHub.
00:20:23 Most people don’t wanna run their own email server
00:20:25 or even their own Git server.
00:20:26 They just wanna like use a hosted thing
00:20:28 that will do all the security and backups for them.
00:20:31 So the thought in my head at that time
00:20:33 was Bitcoin’s this new protocol.
00:20:34 There’s probably gonna be somebody
00:20:35 who makes a hosted service
00:20:37 that does all the security and backups for you,
00:20:39 makes Bitcoin as a protocol easy to use.
00:20:42 So maybe I should make like a hosted Bitcoin wallet
00:20:45 or something, that was my,
00:20:47 it was gonna make Gmail for Bitcoin or something.
00:20:50 And a bunch of people told me that was a bad idea.
00:20:52 Like most of my smart friends who I told about it,
00:20:55 they were like,
00:20:56 well, first of all,
00:20:57 I don’t really get what you’re doing at all.
00:20:59 Like Bitcoin sounds like a scam
00:21:01 or something you’ve gotten involved in.
00:21:04 But then other people who understood what Bitcoin was
00:21:06 told me they thought it was a dumb idea
00:21:07 because they’re like, dude, if you store all this Bitcoin,
00:21:09 you’re just gonna get hacked.
00:21:10 Like nobody, you know, why would you do that?
00:21:14 And so I kind of had this thought like, you know what?
00:21:18 I’m not gonna go all in and like make a store
00:21:21 everyone’s Bitcoin, that would be too much right now.
00:21:22 I have a job, I have a day job, you know?
00:21:25 But let me just make a prototype
00:21:26 and I’ll tell people this is like a beta thing.
00:21:28 Like don’t put any real money in it
00:21:29 and just see if there’s interest.
00:21:31 And if I feel like I’m onto something,
00:21:32 maybe I’ll go do this as a company.
00:21:33 Cause I did, I really wanted to be an entrepreneur
00:21:35 at that time.
00:21:36 I was like, I was 29, I was almost turning 30.
00:21:38 And I was, I always wanted to like start a company,
00:21:40 but I was, you know, I wasn’t yet.
00:21:43 I was an employee at a company that was great.
00:21:45 But so anyway, I had this prototype.
00:21:47 I was hacking together nights and weekends.
00:21:50 I actually wrote a whole Bitcoin node in Ruby,
00:21:53 which turned out to be a, maybe a weird decision
00:21:55 in hindsight, cause Ruby wasn’t the most
00:21:57 performant language.
00:21:58 We’ve subsequently had to rebuild that many times.
00:21:59 But yeah, I had this hosted Bitcoin wallet
00:22:03 and the thing that I didn’t have any users for it,
00:22:05 by the way, I applied to Y Combinator
00:22:08 cause I was like, maybe if somebody there writes me a check,
00:22:10 this will like make it feel like a real company.
00:22:12 And I was trying to find a co founder at that time
00:22:14 unsuccessfully.
00:22:16 So I was basically just wandering in the desert.
00:22:18 I had a lot of self doubt about this cause I was like,
00:22:21 I don’t know, all my friends don’t think this is kind of dumb
00:22:24 and maybe Bitcoin is just gonna get shut down
00:22:27 and like, this is all be some stupid thing.
00:22:29 So there was definitely a feeling of just wandering
00:22:31 lost in the desert, lots of self doubt.
00:22:35 Paul Graham and the Y Combinator group
00:22:37 kind of wrote me the first check
00:22:38 after I went and interviewed and stuff.
00:22:39 And they wrote me a check for like 150K.
00:22:42 And that was the first time somebody
00:22:43 who I really looked up to kind of said,
00:22:46 this is worth pursuing.
00:22:47 Like maybe you’re onto something, maybe you’re not,
00:22:49 but like, let’s at least try it.
00:22:50 And so that was kind of what gave me the confidence
00:22:53 to quit my job and try it.
00:22:55 And I’ll wrap the story here by saying that like we,
00:22:59 I found the right co founder after Y Combinator.
00:23:02 We still didn’t have any customers.
00:23:03 The thing that,
00:23:05 I basically launched the hosted Bitcoin wallet.
00:23:07 There were people signing up.
00:23:09 I just posted on Reddit and places like that.
00:23:11 And maybe like a hundred people would sign up
00:23:13 and then nobody would come back.
00:23:14 And so I was like, I just in Y Combinator,
00:23:18 they often tell you like,
00:23:20 talk to your customers and improve your product.
00:23:21 Talk to your customers, improve your product.
00:23:23 That’s all you’re supposed to be doing.
00:23:24 Try to find product market fit.
00:23:25 So I emailed like five of the users that had signed up
00:23:28 and I was like, hey, I worked on this app.
00:23:30 I saw you signed up.
00:23:31 Can I get on the phone with you?
00:23:32 I get on the phone with like five of these folks.
00:23:34 And I was like, why didn’t you come back?
00:23:36 And the guy was like, well, the app was okay
00:23:38 for a beta, but like, I don’t have any Bitcoins.
00:23:41 So I didn’t really know what to do with it.
00:23:43 And I remember this light bulb kind of went off in my head.
00:23:45 I was like, well, if I put a buy Bitcoin button in there,
00:23:48 would you have used it?
00:23:49 And he was like, yeah, maybe.
00:23:51 So then I had this, we went about the process.
00:23:54 My co founder at that time,
00:23:55 we like got basically had to get like a bank partnership,
00:23:57 payment rails, you know, an exchange,
00:23:59 basic exchange functionality,
00:24:00 all that stuff I was mentioning earlier in place.
00:24:03 And the minute we launched that feature
00:24:05 where you could just click buy,
00:24:06 put in your bank counter credit card,
00:24:07 buy Bitcoin, it showed up in your account.
00:24:09 From that day forward,
00:24:10 like the number of users started to go up like this.
00:24:12 And so we finally had found product market fit
00:24:14 after two years of wandering in the desert.
00:24:17 So you weren’t even thinking about to buy the on ramps.
00:24:20 You would think it would be just the wallet,
00:24:22 a place to store Bitcoin that you’ve already gotten.
00:24:26 Yeah. Okay.
00:24:27 This is, I mean, cause that’s such a pain to do,
00:24:31 to have to work with others to convert dollars
00:24:34 and fiat currency into Bitcoin.
00:24:37 Yeah.
00:24:38 So did you, I mean,
00:24:39 were you overwhelmed by the immensity of the task here
00:24:45 or were you just sort of not allowing yourself
00:24:51 to think too deeply through this whole thing
00:24:53 and just letting the optimism take over here?
00:24:59 You know, I was really looking forward
00:25:00 to like doing something crazy and like a big challenge.
00:25:03 And I wanted to, I love kind of crisis moments like that
00:25:09 where, you know, I’m very determined, right?
00:25:12 And especially when I get like very set on something
00:25:14 and I’m just like, you know what?
00:25:15 I’m gonna figure out a way to make this fucking thing work,
00:25:18 like no matter what.
00:25:19 And so I reveled in that.
00:25:23 I was sort of, I had read all these books about startups
00:25:26 and like every startup has these like, you know,
00:25:28 major setbacks and just like nothing works.
00:25:30 And so that was a sign that you’re doing something right.
00:25:33 I had no idea if I was doing anything right at all,
00:25:35 but I was like, I was kind of loving the experience of it
00:25:38 in a weird way.
00:25:39 It felt, it felt stressful at the time.
00:25:41 Like, you know, nothing was working and,
00:25:43 but I was just, I felt like I was on the right path somehow.
00:25:47 And so I just kept going, I don’t know.
00:25:50 What was the darkest moment that you’ve gone to
00:25:53 in your mind during that time?
00:25:56 What was, what were some of the tougher moments?
00:25:58 You said self doubt.
00:26:00 Yeah.
00:26:01 Have you, yeah, where’d you go?
00:26:04 Where’d you go in your mind?
00:26:06 Is there a moment where you’re just like laying there?
00:26:10 This is, this is hopeless.
00:26:13 Well, there’s a couple of moments I’m remembering.
00:26:15 I mean, so for whatever reason,
00:26:18 I had this like big chip on my shoulder at that time.
00:26:20 And I was like,
00:26:21 I really want to do something important in the world.
00:26:23 Like, you know, I could have a good life
00:26:26 and like work for some good companies
00:26:27 and write some software.
00:26:29 And I’m, for some reason, I never wanted that for myself.
00:26:31 That probably would have been healthier, honestly,
00:26:33 just to like, as an expected value outcome,
00:26:35 that’s probably a better thing in life.
00:26:38 But I was like, I was like, man,
00:26:40 I really want to do something important
00:26:41 and have a bigger impact.
00:26:43 And I was like, I was willing to sacrifice a lot for that.
00:26:46 I was like sleep and not going out with friends and stuff.
00:26:49 I remember one of the,
00:26:50 just for like years working on this stuff,
00:26:52 I remember one of the darker moments was,
00:26:55 we probably had like maybe five employees at that time.
00:27:00 And I remember like a bunch of bad things happened
00:27:03 like all at once.
00:27:04 And it was, so first of all,
00:27:06 you have to remember at this time,
00:27:08 we were all very sleep deprived,
00:27:10 which kind of exacerbates everything.
00:27:11 If you look at like the Exxon Valdez spill
00:27:14 and all these like natural disasters,
00:27:16 like sleep deprivation is often involved.
00:27:18 So, because the reason why we were so sleep deprived
00:27:20 is not just because we were working so much,
00:27:22 but like the site would go offline in the middle of the night
00:27:25 and we’d get, I’d get paged.
00:27:26 I was like on pager duty.
00:27:27 So I’d get woken up sometimes
00:27:28 like two or three times a night,
00:27:29 like have to try to fix something, go back to sleep.
00:27:31 So in that environment, you can kind of get,
00:27:35 you can get discouraged.
00:27:37 So one bad thing that happened was,
00:27:39 we had a bug on the website
00:27:40 and there was thousands of people on Reddit and Twitter
00:27:43 who were all like pissed at Coinbase
00:27:46 because like the balances were showing wrong.
00:27:48 And they were just like, fuck this company, it’s over.
00:27:51 Like, I hate these guys.
00:27:52 And so that was, I’d never had this feeling
00:27:55 of a thousand people mad at me at the same time.
00:27:57 You know, I feel like I’m a pretty chill guy.
00:27:58 Like most of the time people don’t get mad at me.
00:28:00 So that was one.
00:28:02 Another one was that.
00:28:03 Can we pause on that?
00:28:04 That’s so interesting.
00:28:05 So you were saying like, here’s a dream.
00:28:07 I’m trying to create something.
00:28:08 And now forever, the reputation of this dream is ruined.
00:28:13 It will never, it’s irrecoverable.
00:28:15 It’s over, that kind of feeling.
00:28:17 Yeah, well, I didn’t, you’re right.
00:28:18 I didn’t know at that time.
00:28:19 I was like, is this, is this the end?
00:28:21 Like everybody, we’re so, we’re so tiny.
00:28:24 Now everybody hates us.
00:28:25 So is it over?
00:28:26 Yeah.
00:28:28 Nobody told me this before starting a company
00:28:30 that like, you’re a bunch of people will hate you for this,
00:28:33 which is like a very counterintuitive thing.
00:28:35 Cause you know, most companies I think are doing
00:28:38 good things in the world, at least you’re trying, right?
00:28:39 And so even if someone’s like trying,
00:28:41 but they’re not, they’re failing,
00:28:42 I’m generally rooting for them.
00:28:43 At least you’re trying, right?
00:28:45 But that’s not the case at all.
00:28:47 And most founders I’ve known have gone through this too,
00:28:50 where they’re very surprised at the amount of hate
00:28:53 that they get.
00:28:54 And if it’s, I think it’s actually like a muscle
00:28:55 you can build your tolerance to it.
00:28:57 Like, because you know, you go talk to somebody who’s like,
00:29:01 for you, it feels terrible
00:29:02 cause you’re at the center of this storm and like,
00:29:04 but if you go, then you go talk to like, you know,
00:29:06 your family or some other person like, dude,
00:29:08 I didn’t even hear about that.
00:29:08 Like my, they’re just busy in their own life.
00:29:11 And so they, they have no idea
00:29:13 that you had all this negative press
00:29:14 or like whatever it was.
00:29:16 Can I put once again, put a link on that?
00:29:19 Yeah.
00:29:20 There’s an interesting person I’d like to bring up
00:29:23 just as an example, Bill Gates.
00:29:26 Yeah.
00:29:27 So he gets a very large amount of hate on the internet.
00:29:31 Yeah.
00:29:32 And there’s something about him,
00:29:34 this is me talking that you,
00:29:35 that he seems out of touch about that hate.
00:29:39 I believe at least in my understanding
00:29:43 that with the resources he has,
00:29:46 he’s trying and is actually doing a lot of good.
00:29:50 And yet there’s a gigantic amount of hate,
00:29:52 conspiracy theories and stuff like that.
00:29:54 Right.
00:29:55 And it feels like that’s the case
00:29:57 because he’s somehow out of touch with people.
00:30:02 So I wonder how you stay in touch
00:30:04 with the voice of the people
00:30:05 without being destroyed by the outrage.
00:30:08 Is there any wisdom you have to that or?
00:30:11 I don’t know about wisdom, but I’ve thought about this too,
00:30:14 because yeah, you wanna always be open to feedback,
00:30:19 especially from people who have
00:30:20 like your best interests at heart, right?
00:30:22 And if you can become isolated from it
00:30:25 and just like, you know, surrounded by yes people.
00:30:28 And I mean, who knows, maybe like she and Putin
00:30:32 and people like that are in situations I have no idea.
00:30:36 But if you listen to too much of it
00:30:39 and you just try to please everyone,
00:30:40 you’ll never get anything done.
00:30:41 And I mean, most of the best leaders are people
00:30:44 who they can act when they believe
00:30:47 that they’re doing something net positive
00:30:49 for the world and humanity.
00:30:51 And they actually don’t really care
00:30:52 if they piss off some portion of the people.
00:30:55 Almost anything you’re gonna do of significance
00:30:58 in the world today is gonna piss off 5% of people,
00:31:01 maybe 49% of people or whatever, maybe 60%, I don’t know.
00:31:04 So you never wanna become so surrounded
00:31:07 by people who just work for you and will say yes.
00:31:09 And then you think like, well, I’m a genius
00:31:11 and I’m like, that’s how you become a dictator or whatever.
00:31:15 But you also can’t care so much about what people think
00:31:18 because then you’ll never do anything
00:31:19 that’s truly authentic to yourself.
00:31:21 One other thought on that, by the way,
00:31:22 I think it’s a really good question.
00:31:25 So I’ve thought about this a lot.
00:31:26 Like why, you know, people generally kind of hate on Zuck
00:31:29 and they hate on Bill Gates and they hate on,
00:31:33 they don’t really hate on Elon.
00:31:34 Well, actually Elon has a lot of haters too,
00:31:36 but it’s a different thing.
00:31:37 This is measured, this is measured, I was looking
00:31:40 at some surveys, so I think Zuck is the most,
00:31:43 so loved and hated, right?
00:31:46 Zuckerberg is the most, both loved and hated.
00:31:50 He’s the most hated.
00:31:52 And then I think it’s Bill Gates and Elon is down there.
00:31:55 I think it’s like 40% hate Zuck, people asked.
00:31:59 And then Elon is in the double digits,
00:32:02 but low double digits.
00:32:04 And so it’s interesting, you just look at this data,
00:32:06 ask yourself why.
00:32:08 Right, so I ask myself this sometimes too,
00:32:10 because I don’t claim to know any of these people well,
00:32:13 but like I’ve met them briefly.
00:32:15 And my impression is that they’re actually all smart people
00:32:17 trying to do good things in the world.
00:32:18 So there’s not too much difference there,
00:32:21 despite public perception.
00:32:23 So why is it that some are really hated and some aren’t?
00:32:25 I mean, it’s a complicated question.
00:32:28 Obviously Zuck in his Facebook got blamed
00:32:31 for the whole election thing and all that didn’t help.
00:32:34 Social media has gotten a lot of pressure
00:32:36 just from like, hey, why aren’t you solving
00:32:39 all of society’s tough problems?
00:32:40 It’s like, well, they’re just one company.
00:32:42 But one thing I’ve noticed is that a lot of these people,
00:32:47 they have like Asperger’s, right, a little bit.
00:32:49 And sometimes people with Asperger’s
00:32:53 don’t really emote in the same way.
00:32:54 And so I think it’s almost a form of like
00:33:00 bias against their cognitive type or something,
00:33:05 which is like that person doesn’t emote right.
00:33:07 I don’t trust their intentions.
00:33:11 And the other thing I’ve thought about too
00:33:14 is that sometimes I think some leaders,
00:33:18 like maybe Zuck or Bill Gates,
00:33:19 they can come across as like a little bit PR rehearsed.
00:33:22 Like they’re basically,
00:33:24 they’re giving the PR approved answers
00:33:26 where Elon just says whatever he thinks like to a fault.
00:33:29 So even if people hate what he says or like,
00:33:31 at least I believe it’s authentic.
00:33:33 So I’ve always thought about that too for myself.
00:33:34 I’m like, how do I,
00:33:36 cause you can fuck it up on both sides, right?
00:33:38 Like if you just come out and you’re like saying
00:33:39 whatever stream of consciousness,
00:33:42 you’ll often end up like pissing off people on your team
00:33:44 or like saying tripping over some like regulation
00:33:47 that you’ve, there’s all kinds of things
00:33:50 about running a public company,
00:33:51 you can’t say certain stuff.
00:33:53 But if you’re too PR approved and your answer is like,
00:33:56 nobody trusts you what you’re saying.
00:33:58 And so anyway, this is something I think about a lot.
00:34:00 I don’t think I have the right answer,
00:34:01 but I’m trying to find that balance.
00:34:02 And more and more with the internet, there’s a premium
00:34:05 on authenticity, just like you’re saying.
00:34:07 People really, really appreciate that.
00:34:09 So for leaders, it’s a challenge to be,
00:34:11 how do I make sure I’m authentic,
00:34:15 but also don’t say stupid shit.
00:34:19 And so that’s an interesting thing.
00:34:21 I’ve noticed that just having interacted
00:34:23 with a bunch of leaders that you have to be careful
00:34:28 how much you surround yourself with PR folks.
00:34:31 Because the best, I would say, let me just say a nice thing
00:34:34 about marketing and PR folks,
00:34:36 the best marketing folks are extremely good.
00:34:40 So they understand exactly what great marketing is
00:34:43 and great PR, it’s authenticity.
00:34:46 It’s showing, revealing the beauty.
00:34:48 As opposed to PR and marketing out of fear.
00:34:51 Oh, don’t say that, don’t say this, don’t that.
00:34:54 Because then you start living in this kind of,
00:34:57 that pushes you towards a bubble
00:34:58 where you can’t express the,
00:35:00 your beautiful quirks and weirdness
00:35:02 and all that kind of stuff.
00:35:03 And also the cool, the beautiful things
00:35:06 about what you’re doing.
00:35:07 I find like, especially with tech things,
00:35:10 like even like Coinbase,
00:35:12 the way to reveal the beauty of it
00:35:15 is not only by showing all the things you could do with it,
00:35:18 but showing that there’s great engineering
00:35:20 going on underneath.
00:35:22 So letting the nerds shine too.
00:35:23 It doesn’t have to be like these kind of commercials
00:35:28 where it’s like a happy family using Coinbase
00:35:33 to send a transaction about flowers for mom
00:35:36 or something like that.
00:35:37 Like it could be also like gritty stuff and real stuff.
00:35:41 So that’s a general just observation I made.
00:35:45 But you said you were talking about dark moments
00:35:46 and that there’s people on the internet
00:35:49 that were pissed off that the site was down.
00:35:51 And you said there might be something else.
00:35:54 Yeah, so sleep deprived,
00:35:55 like a bunch of people on the internet were pissed at me.
00:35:57 The balances were fucked up.
00:35:59 Like people were tweeting the company’s over,
00:36:01 just give the money back, whatever.
00:36:03 And then, oh yeah, somebody posted.
00:36:07 So we had all this, we didn’t,
00:36:09 we started to get all these customer support inquiries
00:36:11 and like, we only had like a few people at the company.
00:36:14 And so we were backed up maybe like 20,000 support requests.
00:36:18 So people couldn’t get ahold of us.
00:36:19 So somebody posted my cell phone number on Reddit
00:36:22 and they were like, they were like,
00:36:24 if you need to get ahold of the CEO, whatever,
00:36:25 cause everyone’s upset about where their money is.
00:36:28 So I remember we’re in the office,
00:36:30 it’s like late at night.
00:36:31 We’ve been working like 12 hours, we’re all sleep deprived.
00:36:33 I’m trying to hack and like get this bug fixed.
00:36:36 And we all need like food at the office.
00:36:38 And so my phone has been blowing up all day
00:36:41 cause someone posted my phone number on the internet.
00:36:43 And there’s like a guy,
00:36:45 there was a guy like trying to deliver food
00:36:46 and I needed to answer my phone
00:36:48 to like get the food from downstairs.
00:36:50 So I was like, shit, I gotta just see who, if that’s him.
00:36:53 So I started answering the call and it’s like,
00:36:55 is this Brian?
00:36:56 I’m like, nope, wrong number, click.
00:36:58 And I pick up the next call.
00:37:00 It’s like every, when I finished the call,
00:37:02 another call is like coming in.
00:37:03 So I was like, I’m a reporter from Japan,
00:37:06 like asking about a security, nope, wrong number, click.
00:37:09 And then I like, finally I get the delivery guy downstairs,
00:37:11 bring the food up.
00:37:11 We were all like surviving to like fix this bug.
00:37:17 I remember there was just basically a point that night
00:37:18 where I was like, fuck, I need to just,
00:37:20 I basically just curled up on like a ball on the floor.
00:37:24 And I just like cried for a little bit.
00:37:28 I think I let myself just kind of wallow in self pity,
00:37:31 kind of took a nap for about five minutes.
00:37:32 And I was like, let’s fucking solve this.
00:37:35 And I like, you know, stop being like a little whatever
00:37:38 and like got back up.
00:37:39 Sleep deprivation combined with just the stress
00:37:42 and the pressure of the site going down
00:37:44 and everybody wants the site to be up.
00:37:47 Just the pressure from people
00:37:48 and the number of users is growing and growing and growing.
00:37:51 So that pressure is just mentally, mentally tough.
00:37:54 What was your source of strength during that time?
00:37:58 Like what, like somebody that patted you on the back
00:38:02 and said, we got this.
00:38:04 Yeah, well, it definitely helped to have a co founder.
00:38:06 So, you know, there’s like that old saying about
00:38:10 it’s better to be in a great relationship than to be single,
00:38:12 but it’s better to be single than in a bad relationship.
00:38:14 So co founders actually blow up a lot of companies too.
00:38:17 But when you find the right co founder,
00:38:18 which I was lucky to find with, with Fred or some,
00:38:21 that was very important.
00:38:22 There was definitely moments where, you know,
00:38:24 I was like kind of, you know, at the width end or whatever.
00:38:28 And he was like, it’s like, dude, let’s rally.
00:38:31 Like, and he basically carried the team, you know,
00:38:33 a couple of times, like in really key moments.
00:38:35 What advice would you give to startup founders
00:38:39 about this particular stage about surviving it
00:38:43 to the five and through the five employees stage
00:38:46 where you were?
00:38:47 Yeah, well, if your pre product market fit,
00:38:50 the best advice that I have from that period
00:38:52 is action produces information.
00:38:55 So just like keep doing stuff, you know,
00:38:58 I remember like Paul Graham, Paul Graham had this great
00:39:04 line like that.
00:39:05 I think that’s his line.
00:39:06 And he was like, startups are like sharks.
00:39:08 If they stop swimming, they die.
00:39:10 You know, so even if you’re like, not sure what to do,
00:39:12 like just do anything because when you do it,
00:39:14 it’ll like, it’ll produce some information.
00:39:16 Like people liked it.
00:39:17 They didn’t, this was very true for me.
00:39:18 There was times where I just did something
00:39:22 instead of debating it endlessly and like, just try it.
00:39:24 You know, like, all right.
00:39:25 So we shipped it.
00:39:26 And like, there was a couple of times where like
00:39:27 the minute I shipped it and I was like, I knew,
00:39:30 I know we built this wrong,
00:39:32 but now I have an idea of what to do next.
00:39:34 And it wasn’t, I only would have had the idea
00:39:36 if we’d actually gone through the exercise
00:39:37 of going to build it.
00:39:38 It’s like my other favorite analogy for this is that
00:39:42 you’re like at the base of a mountain that’s shrouded
00:39:44 in fog and you’re looking up at the mountain
00:39:47 and you’re trying to think like, okay,
00:39:48 how do I get up there?
00:39:49 But you can only see like three or four steps ahead
00:39:51 cause the fog is so thick.
00:39:52 So you have to just take steps into the unknown.
00:39:55 And when you take three steps,
00:39:57 another three steps will be revealed ahead of you.
00:39:59 And sometimes you’ll end up on some local maximum.
00:40:01 You’ll have to retrace your steps or whatever,
00:40:03 but, or come up to a cliff, you know,
00:40:06 but most people in life don’t take the steps into the fog,
00:40:11 into the unknown because it’s scary.
00:40:14 Or they’re like, I don’t know, what if I fail?
00:40:15 Or like, I don’t know how that’s going to work
00:40:17 or I might run out of money
00:40:18 or I won’t be able to get a job after,
00:40:19 or I don’t know, whatever reason.
00:40:21 But that is like one of the things that separates,
00:40:24 I think entrepreneurial people with that kind of inclination
00:40:27 is that they have sort of a comfort with this risk tolerance
00:40:31 but it’s actually not really risky if you think about it.
00:40:33 It’s not like, you know, at least in most places,
00:40:38 like, you know, if you go to a startup and it fails,
00:40:40 like you’re going to, you’re even more valuable
00:40:42 to your next employer, right?
00:40:44 Or you can go raise a seed round, pay yourself a salary,
00:40:47 try it for like two years or three years.
00:40:49 If it doesn’t work, go get another job.
00:40:50 It’s not like you’re,
00:40:51 you weren’t paying yourself a salary during that time.
00:40:53 So I think, I think people overestimate the risk
00:40:55 of doing a startup and they just never,
00:40:57 they never start because it seems crazy
00:41:00 and all your friends think it’s silly.
00:41:02 Like that’s sort of the default nature
00:41:03 of every big startup idea.
00:41:05 It’s just basic fear.
00:41:06 It’s the same kind of fear that if you see a,
00:41:08 if you’re a guy, see a cute girl at a bar,
00:41:11 it’s the fear associated with coming up to her,
00:41:14 you like her, asking her.
00:41:15 It’s like, what’s the actual risk exactly?
00:41:18 Right.
00:41:19 She’ll say, no thanks, I’m not interested.
00:41:20 No thanks.
00:41:21 I guess the risk is like,
00:41:23 that’s going to be mentally difficult
00:41:26 to deal with rejection.
00:41:27 So just like it’s mentally difficult to deal with failure.
00:41:31 If you had a bunch of ideas and you were excited about them
00:41:33 and you implement them and you realize they’re not good,
00:41:37 that could be difficult to keep pushing through that.
00:41:40 But I suppose that’s life.
00:41:41 You’re supposed to, you know,
00:41:44 perseverance through the failures and then the risk is low.
00:41:48 So that’s, and then the whole time through the fog
00:41:50 up the mountain, you’re looking for product market fit.
00:41:52 Yeah, that’s right.
00:41:53 So you know, you have it when the usage of your product
00:41:55 keeps growing without any marketing dollars
00:41:57 or anything like that.
00:41:58 It’s just like more people keep coming back
00:41:59 every week or month.
00:42:01 So you’re kind of keep,
00:42:02 you’re basically watching your stats.
00:42:04 Nothing is working.
00:42:05 You see these little wiggles of false hope in your metrics
00:42:09 and you basically just keep talking to customers,
00:42:11 fixing the, improving the product,
00:42:12 talk to customers, improve the product,
00:42:13 talk to customers, improve product, you know,
00:42:16 and try not to run out of money.
00:42:17 So be really scrappy.
00:42:19 And then if you’re lucky, you hit some kind of threshold
00:42:22 where like, okay, the thing is good enough now,
00:42:24 or we hit on some use case and then it’ll organically
00:42:26 start to grow a bit.
00:42:28 And then you have a whole different set of problems
00:42:30 once you hit product market fit,
00:42:31 which is how do we scale this thing?
00:42:34 How do we hire people?
00:42:35 How do we, you know, hire an executive team
00:42:39 or raise more money?
00:42:39 And like, so the problems totally change, but yeah.
00:42:42 Well, you were there through the whole thing.
00:42:45 So that’s the other question that’s fascinating.
00:42:48 Again, back to the girl at the bar,
00:42:50 how do you hire people?
00:42:52 It’s like, how do you find good friends?
00:42:55 How do you find good relationships?
00:42:57 And in this specific case, how do you hire good people?
00:43:01 Engineers, executive, all of it.
00:43:04 One thing is I’ve done a lot of reps on hiring
00:43:06 at this point.
00:43:07 So Coinbase has about 5,000 people,
00:43:12 probably the first 500 people or something,
00:43:14 maybe in that range.
00:43:16 You know, I interviewed every single one of those,
00:43:18 but you have to remember there’s probably like,
00:43:20 I don’t know, on average, maybe 10 people
00:43:22 that we went in the process for every one we hired
00:43:25 or something.
00:43:25 So it was like, by the time that we had 500 employees,
00:43:29 I had done like 5,000 interviews or something.
00:43:31 I was like very burned out on interviews.
00:43:32 I had been doing, some days I did like seven interviews
00:43:36 in a day or maybe, you know, you’ve been doing
00:43:39 lots of interviews, maybe you wouldn’t get burned out,
00:43:40 but different kind of interviews.
00:43:42 Very different, very different, very different,
00:43:45 because you’re, so first of all,
00:43:49 most of your interviews lead to rejection.
00:43:51 Yeah.
00:43:52 Which is also exhausting.
00:43:54 Yeah, and there’s a whole part of the interview
00:43:57 which is about candidate experience, right?
00:43:59 Sometimes you know it’s not the right person,
00:44:00 but you wanna make sure they have a good experience.
00:44:02 Yes.
00:44:03 Like, if you’re just exhausted
00:44:04 and you’re on your sixth interview
00:44:05 and you’re like, well, thanks for coming in
00:44:06 and you wrap and you just, and then like,
00:44:08 you’re gonna create a detractor.
00:44:09 Someone who’s out there like, fuck that company
00:44:11 or Brian was rude to me or whatever.
00:44:12 So I had to, honestly, I had to work on that a little bit
00:44:15 in the early days because I was doing so many interviews.
00:44:16 Like I needed to make sure that when people came in,
00:44:20 I was like, you know, made them feel comfortable,
00:44:23 asked them a couple of like warmup questions,
00:44:25 just like, oh, how was it getting in the office?
00:44:27 Like, did you find it okay?
00:44:27 And like, what have you been up to this week?
00:44:29 And not just like, you know, like a factory assembly line
00:44:32 like boom, boom, boom, like, yeah.
00:44:34 But also there’s a moment,
00:44:35 cause I’ve interviewed a bunch of people
00:44:37 for like teams and stuff.
00:44:38 There’s also a moment when you, early on,
00:44:40 know it’s not gonna be a good fit
00:44:42 and you still have to land that plane
00:44:45 and all that kind of stuff.
00:44:46 And that could get really, really, really exhausting.
00:44:49 So yeah, anyway, sorry.
00:44:50 So.
00:44:51 Yeah, so basically we tried all,
00:44:53 we’ve tried so many things over the years
00:44:54 to make interviews more efficient
00:44:55 cause it’s a huge time sink for the team.
00:44:58 So, you know, we basically,
00:45:00 we’ll usually get them down to like 25 minutes.
00:45:03 I’ve seen, if you’re trying to hire like a big team,
00:45:05 let’s say, you know,
00:45:08 of people who are like contractors or something,
00:45:10 not necessarily full time employees.
00:45:11 I’ve seen people actually do 10 minute interviews.
00:45:14 You can even interview like a thousand people
00:45:16 almost like in a week or something.
00:45:17 I’m not sure if that quite works out,
00:45:18 but let me a little less than that.
00:45:20 But you can basically get six and six done in an hour.
00:45:23 If you’re just, I need to get a team of 30 contractors
00:45:25 for whatever purpose.
00:45:26 But if you’re talking about full time employees,
00:45:28 I usually do like 25 minute.
00:45:30 You know, you’re oftentimes like,
00:45:32 one thing we’ve done is we’ll put like a Google form online
00:45:37 and it’s like, put some basic hurdles in there.
00:45:39 Like, you know, ask them to put in an answer,
00:45:43 which you can check in a spreadsheet
00:45:44 if it was correct or not.
00:45:45 And like, there was some funny examples
00:45:46 in the early days of Coinbase
00:45:47 where we’d put in like brain teasers and stuff,
00:45:49 but we don’t do that anymore.
00:45:50 We do like normal interviews, we do references.
00:45:52 The kinds of things I ask in interviews,
00:45:56 you know, it’s usually like,
00:45:57 I like to think about what do we need this person
00:46:00 to accomplish in this role, right?
00:46:03 And get really specific about that.
00:46:05 It’s like usually something pretty hard.
00:46:07 And then I’ll ask them a question.
00:46:08 It’s like, tell me about a time you did X
00:46:11 and, or tell me about the hardest,
00:46:14 the hardest kind of problem you’ve had to solve in Y
00:46:17 and what did you do specifically to overcome it, right?
00:46:20 So I’m asking to see if they can actually do the stuff
00:46:22 we need to get done.
00:46:23 But then I’m also kind of asking like culture questions
00:46:25 if I’m interviewing for that.
00:46:27 And so I’m trying to see like,
00:46:29 are they concise communicators?
00:46:30 Can they just give me a clear answer and stop talking?
00:46:34 Some people like ramble on for like five, 10 minutes
00:46:37 if you ask the first question.
00:46:38 Some people are, you know, they’re interrupters
00:46:41 like church of interruption.
00:46:42 So like they won’t stop talking until you interrupt them,
00:46:44 which for me, I’m always patient and I wait.
00:46:46 So that’s weird.
00:46:49 I’m looking to see for humility too.
00:46:50 Like, you know, I’ll tell us people,
00:46:53 I’ll tell you about a time something went really wrong.
00:46:55 Like you had conflict with someone on a team
00:46:57 or what I’m kind of looking for is,
00:47:00 were they part of the solution
00:47:01 or are they still holding onto like blame and criticism
00:47:03 about that and be like,
00:47:04 well, I told them they shouldn’t do that way,
00:47:06 but they didn’t listen to me.
00:47:07 And you know, these are all like bad signs.
00:47:09 So I’m looking for, yeah, can they get the job done?
00:47:11 Will they work together on a team?
00:47:13 Can they communicate effectively?
00:47:15 Do they fit into our cultural values and you know,
00:47:18 those kinds of things.
00:47:19 Yeah, I mean, there’s a,
00:47:20 cause I’ve even for help with this podcast here,
00:47:24 but also at MIT and so on, I’ve done a bunch of hiring
00:47:27 and I was always looking for, you said, brain teasers,
00:47:30 all kinds of simple questions that can,
00:47:33 they can reveal a lot of information
00:47:35 and it’s always been challenging.
00:47:36 I used to, I still ask this question,
00:47:39 but do you think it’s better to work hard or work smart?
00:47:45 And you know, I had this idea that I’ve,
00:47:50 that I think I’ve matured about,
00:47:54 which is I kind of believe that people who say work smart
00:47:59 on that question don’t actually work smart.
00:48:03 So the right textbook answer is it’s better to work smart.
00:48:07 But the reality is it’s people that haven’t actually
00:48:12 ever done anything that say work smart.
00:48:14 They’re like, they haven’t really struggled
00:48:17 because my general belief at the time
00:48:20 was in order to discover what it means to work smart,
00:48:25 to be efficient, to, you have to work your ass off.
00:48:29 So you have to really fail a lot
00:48:30 and failure feels like hard work.
00:48:33 And so I was always suspicious of people
00:48:36 that would say work smart.
00:48:37 I would want to interrogate that question.
00:48:41 But then I also, you know, have learned that there is people
00:48:45 that are just exceptionally, exceptionally efficient.
00:48:51 They really do know what it means to work smart,
00:48:53 even at a young age.
00:48:55 And so like, you can’t just disqualify based on that.
00:48:58 You have to dig in deeper.
00:49:00 But some of the most interesting people I’ve ever worked
00:49:02 with would say work hard unapologetically.
00:49:05 And they’re usually the ones that know how to be efficient,
00:49:08 which is, it’s just an interesting thing like that.
00:49:11 And I’ve always searched for questions of that nature
00:49:13 to see can I get a person to reveal something profound
00:49:21 about them in as brief of a question as possible?
00:49:26 And I, you know, and then of course,
00:49:28 there’s basic attention to detail and brain teasers
00:49:31 and stuff like that, depending on the role,
00:49:33 programming and so on to see can they solve a tricky puzzle
00:49:38 and do so, like one that doesn’t require a lot of effort,
00:49:40 but requires a certain nonlinear way of thinking.
00:49:46 Is there some, I mean, maybe you don’t want to reveal,
00:49:49 but is there some questions that you sometimes
00:49:52 find yourself leaning on?
00:49:55 You said like, how did you solve a hard problem
00:49:58 in your past and have them talk through it?
00:50:01 That’s one.
00:50:02 You know, we started with brain teasers periodically
00:50:04 at Coinbase and we got away from that relatively quickly.
00:50:07 And I think one, it’s a tough one
00:50:10 because I actually think it does show how somebody
00:50:15 kind of performs under pressure,
00:50:16 but it’s, I don’t think it’s a super reliable indicator
00:50:18 because there’s some people who are really good
00:50:22 in the typical work situation,
00:50:25 but that’s not a typical work situation
00:50:26 where somebody puts you on the spot,
00:50:27 like in a live interview and sometimes people get nervous
00:50:29 and they can’t think clearly
00:50:31 and like they don’t have their computer in front of them
00:50:32 or whatever they normally use.
00:50:35 So yeah, I’m a little skeptical now
00:50:39 of the brain teaser thing.
00:50:42 There is a whole, yeah, there is a whole question about,
00:50:46 like a lot of universities are getting rid of,
00:50:48 you know, entrance exams.
00:50:48 So if you’re hiring right out of universities,
00:50:52 sometimes it’s becoming a less reliable indicator
00:50:54 of like, are they in that university?
00:50:56 And I’ve heard some companies, we haven’t done this yet,
00:50:58 but I’ve heard some companies are actually creating
00:50:59 their own like for college grads,
00:51:01 like their own basically exams, like standardized testing
00:51:06 almost to get people in the door
00:51:08 because the degree almost like doesn’t mean
00:51:10 what it used to, which is the whole topic, but.
00:51:12 Yeah, that’s fascinating because it’s fascinating both
00:51:17 for that, because it’s not just about you trying
00:51:19 to hire a great team, it’s also to help them find
00:51:22 the right place to work at.
00:51:23 Yeah.
00:51:24 It’s like a two way street.
00:51:28 All right, so once you found the product market fit,
00:51:32 how did Coinbase become what it is today?
00:51:38 Ooh.
00:51:39 So let me ask an engineering question actually.
00:51:42 Sort of from the Ruby wallet days,
00:51:47 what are some of the interesting challenges there?
00:51:50 Or are they not engineering?
00:51:52 Just the things that had to be solved, what were they?
00:51:56 Engineering, regulation,
00:51:59 financial hiring, lawyers, what was it?
00:52:07 So post product market fit, yeah, a lot of it’s scaling
00:52:10 and you got to build out an actual company.
00:52:12 So I remember I was still writing a lot of code there
00:52:15 for a while and we were hiring in,
00:52:17 we had like maybe 25 people or something.
00:52:19 I remember one of our investors came by one day
00:52:21 and he was like, Brian, how much of your time
00:52:22 are you spending writing code?
00:52:24 And I was like, maybe 50% or something.
00:52:27 And he was like, how much time are you spending hiring people?
00:52:29 I was like, probably 20%.
00:52:31 And he was like, I think you need to flip those numbers.
00:52:35 Like this company is not going to scale.
00:52:36 You’re the CEO, you don’t need to be writing code every day.
00:52:39 You’re going to have to transition that stuff.
00:52:40 Like even if people can’t,
00:52:41 all that stuff’s locked in your head.
00:52:43 So maybe they’re not going to do it as well as you
00:52:44 for the first six months or something.
00:52:46 But like, if you don’t start to transition it,
00:52:48 you’re never going to build a real company.
00:52:49 It’s just going to be, you’re going to be the bottleneck.
00:52:52 So, you know, like a lot of founders that took me a while
00:52:55 to like really internalize that lesson.
00:52:57 I’d always heard people say that and, you know,
00:52:59 but I still was holding on too much to decision making.
00:53:02 And I probably still am, by the way,
00:53:04 like even to this day at Coinbase,
00:53:05 where we continually have to push down decision making
00:53:08 in the org, like even with 5,000 people,
00:53:10 like who are the owners of each of these things?
00:53:12 And so the temptation is people to push it up
00:53:14 and you become a bottleneck.
00:53:15 And anyway, so yeah, you basically need to make sure
00:53:19 you have enough money where you don’t die
00:53:21 if there’s some kind of a downturn
00:53:23 or hit break even profitability.
00:53:24 We were in a position where we were periodically profitable
00:53:27 during up periods, but then crypto would go down
00:53:29 and we were unprofitable.
00:53:30 And so we had to kind of manage our own psychology
00:53:33 and the balance sheet to make sure we didn’t like die
00:53:35 in the downturn, which a lot of crypto companies did.
00:53:38 We had to basically professionalize a whole bunch
00:53:41 of services that had been just very quickly thrown together
00:53:44 by like 20 year olds, right?
00:53:46 Whether that was cybersecurity, it’s like, okay,
00:53:47 how do you get like a really senior experienced
00:53:50 cybersecurity person, but not someone who’s so senior
00:53:52 that they can’t get their hands dirty
00:53:53 and they can come into a company with 25, 50 people.
00:53:56 How do you get a finance person to come in and do that?
00:53:58 Our finances were a mess.
00:54:00 Like we didn’t even really know how much money we had
00:54:01 at certain times and stuff.
00:54:03 I mean, this was, it’s embarrassing to say,
00:54:04 but it was true.
00:54:05 Like I remember there was a point where we had raised,
00:54:09 I think like our series C or something like that.
00:54:12 And I think we had our bank accounts.
00:54:14 I just put like $25 million, like in a different bank
00:54:17 account that none of this stuff was touched
00:54:19 to the actual operations of business.
00:54:20 Cause I was like, our operations were so messy
00:54:23 and we needed to hire a new finance person.
00:54:25 And I was like, I’d heard horror stories
00:54:28 of actually startups where they thought
00:54:29 they had X amount of money.
00:54:31 And then it turned out they had way less.
00:54:33 And then the whole thing was insolvent in like three weeks.
00:54:35 So you wanted to have some padding to at least like,
00:54:37 all right, I can at least count on this to save us
00:54:39 if we go to like super negative.
00:54:41 Right, I mean, it was like a cheap hack,
00:54:43 but that was like the only I could come up with.
00:54:46 And until we could hire like a real CFO and finance team
00:54:49 who like, okay, now we got our arms around
00:54:52 how much cash we have.
00:54:52 It sounds silly, but we had such high volume
00:54:55 of money coming in and out.
00:54:56 Anyway.
00:54:57 What was the ordering of hiring by the way?
00:54:59 Like how many engineers was it early on?
00:55:03 You said CFO was not, you didn’t even have a CFO for a bit.
00:55:06 Like what was the landscape of hiring
00:55:10 as you building up this company?
00:55:13 Was it engineering focused?
00:55:15 Well, let’s see.
00:55:16 I mean, so the first person we hired was just like,
00:55:18 we need to solve customer support.
00:55:20 So we brought someone to do that
00:55:20 because we were all staying up till midnight every night
00:55:22 trying to do customer support.
00:55:23 And then we got more engineers.
00:55:26 And then I think maybe the sixth hire
00:55:27 or something like that was a recruiter.
00:55:29 Cause that turned out to be, you need to build,
00:55:31 hire the person who can hire more people.
00:55:34 That turned out to be a great force multiplier.
00:55:37 And then you’re going down the list.
00:55:39 Eventually you want to hire some more senior people.
00:55:43 We needed legal and compliance.
00:55:45 We needed that really badly.
00:55:46 Cause we, it was all kinds of questions about
00:55:48 what the legality of it was.
00:55:50 Was it hard to find legal people that work with crypto,
00:55:52 like serious adults?
00:55:54 Cause it’s such a cutting edge new world.
00:55:57 Yeah, I mean, there was nobody who had like more than,
00:56:01 nobody had three years of experience with it
00:56:02 cause it had only been around a few years.
00:56:04 So yeah, we were finding people from adjacent fields.
00:56:07 There’s a certain personality type of people
00:56:08 who are willing to join early companies
00:56:10 because they have no structure.
00:56:12 You can’t really commit to them about
00:56:14 you’re going to have this team or this boss or whatever.
00:56:16 Like everything’s in chaos and flux.
00:56:18 So it takes, yeah, hiring is one of the hardest things
00:56:22 in the early stage for sure.
00:56:23 You got to find people crazy enough
00:56:24 to join you on this journey.
00:56:26 So one of the interesting things about Coinbase
00:56:28 and you’ve written, we’ve talked, we’ll talk about it a bit.
00:56:31 You’re very focused on the mission.
00:56:33 Yeah.
00:56:34 You’re very kind of, I think that simplifies things
00:56:37 that makes hiring easier,
00:56:40 that makes working at Coinbase easier,
00:56:42 that makes, I mean, it’s similar.
00:56:44 So Elon has the same thing.
00:56:46 It’s pretty clear.
00:56:47 It’s pretty clear what we’re here to do.
00:56:50 So I suppose what’s the mission of Coinbase?
00:56:55 Well, it’s to increase economic freedom in the world.
00:56:57 And what is economic freedom?
00:56:59 Yeah, so economic freedom is this term kind of like GDP
00:57:02 that economists use.
00:57:04 And it’s basically a measure of different countries
00:57:05 around the world.
00:57:06 It looks at things like,
00:57:07 are there property rights enforced?
00:57:09 Is there free trade?
00:57:10 Is the currency stable?
00:57:12 Can you start companies that you wanna start?
00:57:14 And can you join the ones you wanna join?
00:57:15 And is there corruption and bribery prevalent
00:57:18 or is it relatively free of that?
00:57:20 And so there’s several different organizations
00:57:24 that basically score countries by economic freedom.
00:57:27 And the really cool thing about economic freedom
00:57:28 is that basically it positively correlates
00:57:31 with things that we all want in society,
00:57:33 like not only higher growth of the economy,
00:57:36 but also things like higher self reported happiness
00:57:39 of citizens, better treatment of the environment,
00:57:41 better income for the poorest 10% of people.
00:57:44 And it negatively correlates with things
00:57:45 we don’t want in society,
00:57:46 like corruption and bribery and war,
00:57:48 even in things like that.
00:57:50 And so it’s this pretty crazy provocative idea,
00:57:53 which is that if you give people good property rights
00:57:58 and rule of law and allow them to trade,
00:58:01 it basically encourages them to do more good stuff
00:58:03 and the whole society benefits.
00:58:05 Like one of the things, you may have noticed this
00:58:08 growing up in various places you did,
00:58:09 or I spent a year living in Buenos Aires, Argentina
00:58:12 that went through hyperinflation.
00:58:13 And there’s a certain like pessimism
00:58:15 that can creep into countries
00:58:18 when they don’t have economic freedom,
00:58:21 which it’s basically like everyone has this bit of this vibe,
00:58:24 which is like, don’t stick your head up,
00:58:26 don’t try too hard because it could all be gone tomorrow.
00:58:28 Like the things that really are valuable in life
00:58:30 are just family and friends
00:58:32 and the past was better than the future will be.
00:58:35 And so you don’t really, people don’t try as many,
00:58:37 they don’t try hard because you’re not really sure
00:58:40 you can actually keep the upside of your labor
00:58:42 if you try hard, so you just don’t try as hard.
00:58:44 Whereas in America, historically,
00:58:47 or high economic freedom countries,
00:58:51 people basically like they just try more stuff
00:58:53 because they’re like, if I do good for other people,
00:58:55 I’ll get to keep part of it for myself
00:58:56 and I can improve my lot in life
00:58:58 and for my children and my community, whatever.
00:59:00 So I realized when I read the Bitcoin white paper
00:59:03 a long time ago, that at least I had a hunch.
00:59:06 At the time I was like,
00:59:07 this might be a really powerful piece of technology
00:59:09 that can inject good financial infrastructure
00:59:13 into all these countries around the world that don’t have it.
00:59:15 Basically good economic freedom principles
00:59:18 in like property rights and things like that
00:59:20 into these countries all over the world,
00:59:22 which just as long as you had a smartphone
00:59:23 and now crypto got invented,
00:59:25 everybody could have economic freedom.
00:59:27 And it’s crypto is kind of really well suited
00:59:28 for economic freedom,
00:59:29 because if you want property rights,
00:59:31 it’s based like crypto is,
00:59:32 if you can remember a 12 word phrase
00:59:34 or have an app on your phone,
00:59:37 you can store as much wealth as you want.
00:59:38 And it can’t be taken away from you.
00:59:39 You can even, there’s like refugees who need to flee
00:59:42 and they wanna take their wealth with them
00:59:44 and they can’t do it often
00:59:46 in the traditional financial system.
00:59:47 And so crypto lets them do that, right?
00:59:49 Crypto is inherently global.
00:59:51 So it allows free trade and cross border payments.
00:59:54 It makes it easy to accept payments from people globally.
00:59:57 It provides a stable currency to everyone,
01:00:00 not only with Bitcoin,
01:00:00 which is kind of like this new reserve currency,
01:00:03 but also with stable coins, right?
01:00:05 Which are new inventions there.
01:00:08 So yeah, I basically feel like crypto
01:00:10 is this secret hiding in plain sight
01:00:13 that can create economic freedom
01:00:14 for people all over the world
01:00:15 and a more fair and free and global economy.
01:00:18 Well, so the limit,
01:00:21 and by the way, I didn’t know about Argentina.
01:00:22 Why’d you end up in Argentina?
01:00:25 Okay, so I was basically,
01:00:28 I was living in Houston, Texas after college
01:00:30 where I went to school.
01:00:31 And I had never studied abroad.
01:00:34 I kind of like, I don’t know,
01:00:36 I felt like I needed some adventure or something in my life.
01:00:38 And I was like, I was running this other startup
01:00:40 that I was trying at the time, a tutoring company,
01:00:41 and I could work from anywhere.
01:00:43 So my plan was, you know what,
01:00:44 I’m just gonna go do like a month
01:00:47 in every city around South America,
01:00:49 just like almost like to force myself
01:00:51 out of my comfort zone
01:00:52 because I had never traveled by myself
01:00:54 to a foreign country or whatever,
01:00:55 and where I didn’t really speak the language.
01:00:57 And anyway, I landed in Buenos Aires
01:01:00 thinking I’d go all around South America
01:01:01 where I had never been there.
01:01:03 But I basically, once I was set up in Buenos Aires
01:01:06 with an apartment and a cell phone and stuff,
01:01:08 then I was like, I don’t wanna do that all again next month.
01:01:10 So I just stayed there for most of the time
01:01:11 and took some day trips.
01:01:12 But yeah, it was kind of a formative experience
01:01:15 in that regard.
01:01:15 You got a chance sort of unexpectedly
01:01:18 to experience the social effects of hyperinflation,
01:01:21 which is interesting.
01:01:22 But I also, I’ve never been,
01:01:24 I really, really wanna go as a person who likes tangos,
01:01:26 a person who likes the Argentinian national team
01:01:29 and soccer and steak.
01:01:34 All right, and all the other things
01:01:36 that Argentina is known for.
01:01:38 Okay, so economic freedom.
01:01:41 One of the limits on economic freedom
01:01:43 comes from government and government regulations
01:01:46 and all those kinds of things throughout the world.
01:01:49 So how does cryptocurrency help resist that?
01:01:52 So can you sort of elaborate a little bit further?
01:01:55 What are the things that limit economic freedom
01:01:57 and how does crypto help ease that?
01:02:03 Today the world, like the traditional financial system
01:02:05 is basically every country of the world for the most part
01:02:08 has their own currency.
01:02:10 And so there’s a group of people or institutions
01:02:13 in each of those countries that’s controlling
01:02:15 that economic policy or that money supply.
01:02:18 And it can be manipulated, right?
01:02:22 So it’s not like many of these currencies
01:02:25 are not linked to gold standard.
01:02:26 The U.S. kind of famously came off that in 1970s,
01:02:29 for instance, but if you read Ray Dalio and all this stuff
01:02:32 like he talks about, there’s thousands of fiat currencies
01:02:34 that have been in existence over time.
01:02:36 And basically all of them eventually get disconnected
01:02:39 from backing of like hard commodities
01:02:43 and then they get overinflated and printed.
01:02:46 And so in times of stress, with Nixon,
01:02:50 I guess it was like in the U.S. it was the Vietnam War
01:02:53 or something like that.
01:02:54 It kind of drove government spending.
01:02:56 And so under times of stress, they say,
01:02:57 hey, it’s a temporary measure.
01:02:59 We need to break the peg.
01:03:00 Temporary was like famous words that he used
01:03:02 and they go print.
01:03:07 And so the bad thing about that, of course,
01:03:09 is that it sort of erodes people’s like wealth
01:03:11 if they can only hold their assets in cash,
01:03:13 which basically like poor people tend to do that.
01:03:16 If you’re wealthy, you can hold stocks
01:03:19 or like real estate and things like that.
01:03:20 But it’s really a tax on the poorest people
01:03:22 in society, inflation.
01:03:24 So anyway, crypto in a way is a little bit
01:03:28 of like a return to the gold standard
01:03:30 in this digital era, right?
01:03:31 Bitcoin, there’s guaranteed scarcity of it.
01:03:33 It’s deflationary.
01:03:34 There’s never gonna be more than 21 million Bitcoin.
01:03:37 And so that’s a really important principle.
01:03:42 I also think not just Bitcoin,
01:03:44 but like cryptocurrency generally,
01:03:46 it’s really important in terms of this,
01:03:48 you asked about regulation, right?
01:03:50 So think about like, if you wanted to make a global borrowing
01:03:55 and lending marketplace or a global exchange,
01:03:59 you would have to go to all 200 countries in the world,
01:04:01 sometimes like maybe 50 states in the US
01:04:03 and get lending licenses or an operating exchange
01:04:07 or whatever.
01:04:09 And that’s just an incredible amount of work.
01:04:12 And you can’t even do business in many of these countries
01:04:14 because like you have to bribe somebody
01:04:17 or it’s corrupt or whatever.
01:04:18 And so, but with DeFi, with decentralized finance,
01:04:22 people have published like Uniswap
01:04:24 as a decentralized exchange.
01:04:26 Everybody in the world, no matter what country you’re in,
01:04:28 what jurisdiction can interface
01:04:30 with that decentralized exchange
01:04:32 and there’s no central company operating it.
01:04:35 It’s a smart contract on the Ethereum blockchain,
01:04:38 which is globally decentralized.
01:04:40 So there’s no throat to choke.
01:04:41 There’s no one person or a company you can go to
01:04:43 to like, hey, shut this thing down.
01:04:45 Even if everybody who’s working on Uniswap today stopped,
01:04:48 the Uniswap smart contract would continue to operate
01:04:52 on the Ethereum blockchain.
01:04:54 Similarly for like a borrowing and lending marketplace,
01:04:56 like somebody in India wants to borrow
01:05:00 from somebody in the US or whatever,
01:05:02 there’s very difficult to do that
01:05:04 in the traditional financial world,
01:05:06 but in a smart contract that’s decentralized,
01:05:08 you can enable anybody to access it.
01:05:10 So it’s really kind of this great democratizing force
01:05:14 that is creating a new financial system
01:05:16 that is more fair and more free.
01:05:19 Yeah, and in some ways it’s a clever way
01:05:24 that’s enabling people to do that in a novel way.
01:05:28 So is Uniswap in some sense a competitive Coinbase?
01:05:32 In which way is it and which way is it not?
01:05:34 So because for people who don’t know,
01:05:38 Coinbase is centralized.
01:05:40 So let me ask, doesn’t that go against the spirit of crypto
01:05:45 since crypto is decentralized?
01:05:49 What are the pros and cons of being centralized
01:05:51 as an exchange?
01:05:53 So I don’t think Coinbase is fully centralized.
01:05:55 We have many different products.
01:05:57 And the way that I think about it is that our exchange
01:06:01 or our brokerage is a centralized,
01:06:03 regulated financial service business.
01:06:06 And it’s actually important for the crypto ecosystem
01:06:08 to have that because you wanna allow a lot of the fiat money
01:06:11 in the world to flow into the crypto economy.
01:06:13 So we’re very proud of that.
01:06:15 And I think we’ve helped a lot of that money flow in.
01:06:18 Now, once people have money in crypto,
01:06:20 they can choose to hold it in a variety of ways.
01:06:22 And they can choose to hold it in a self custodial wallet,
01:06:24 which is more decentralized.
01:06:26 They can choose to use decentralized exchanges,
01:06:29 which we love and Uniswap is not really,
01:06:32 I don’t think of them as like a direct competitor to us.
01:06:34 We basically have integrated Uniswap
01:06:37 into a number of our products.
01:06:38 We love DeFi, decentralized exchanges, the whole thing.
01:06:41 So Coinbase wallet, which is a self custodial wallet,
01:06:46 is more decentralized and it allows people
01:06:48 to hold their own crypto.
01:06:51 They don’t have to trust us.
01:06:52 Can you explain what a self custodial wallet is?
01:06:55 What is a wallet and what is a self custodial wallet?
01:06:58 Yeah, so it’s confusing.
01:07:00 So a custodial wallet means you’re trusting Coinbase
01:07:04 to store your crypto, the private keys themselves.
01:07:08 And for some people and institutions and everything,
01:07:11 just meeting them where they are today,
01:07:12 that’s nice because it’s simpler.
01:07:17 They’re not afraid of losing their crypto
01:07:18 if they make some accidental mistake.
01:07:20 Or so custodial crypto products are important
01:07:25 to help get a bunch of people into the ecosystem.
01:07:27 But I’m very supportive of self custodial wallets.
01:07:30 And I think in some ways they are the future
01:07:32 because more and more people are gonna want
01:07:34 to store their own crypto,
01:07:35 not trust a third party institution to do it.
01:07:37 And in some ways that is much more authentic
01:07:38 to the ethos of crypto.
01:07:40 So Coinbase will help you convert the fiat into crypto.
01:07:43 And frankly, that’s a more centralized thing.
01:07:46 But once you have crypto,
01:07:46 you can then go to the self custodial world,
01:07:49 store it yourself.
01:07:50 And to get into the technical details just for a second,
01:07:53 it’s basically saying you’re gonna store the keys
01:07:56 on your own device.
01:07:57 And so even if Coinbase gets some court order to seize it,
01:08:02 we actually can’t.
01:08:03 From an architecture point of view, we can’t do it.
01:08:06 Or if Coinbase gets hacked or something,
01:08:08 we can’t lose your funds.
01:08:09 Now the thing is you have to take the responsibility
01:08:12 because we’re not taking it.
01:08:13 So the individual person could get hacked.
01:08:15 And there’s a whole bunch of really cool research happening
01:08:18 to make self custodial wallets more resilient
01:08:21 to accidental loss, hacks, and just user error.
01:08:28 I don’t know how much you’ve looked at various cryptography
01:08:30 things, but basically, you can have multiple signatures
01:08:35 from different keys on different devices
01:08:37 where you need two of the three or three of the five.
01:08:39 There’s a whole technology called multi party computation
01:08:43 or threshold signing signatures, which is really cool.
01:08:46 But those are the things you would run locally?
01:08:49 These are all security measures, cryptography measures
01:08:52 to protect you without a centralized component?
01:08:56 Right.
01:08:57 So a simple example would be, let’s
01:08:59 say you had a two of three key signature.
01:09:02 And one key might be stored at Coinbase,
01:09:04 but that’s not a quorum.
01:09:06 So we couldn’t unilaterally move your funds.
01:09:08 But another key is on your device, on your phone,
01:09:10 let’s say.
01:09:10 Oh, cool.
01:09:12 So in a normal situation, you have a key on your phone.
01:09:14 We have one.
01:09:17 And so two out of three, it can all
01:09:20 get signed very quickly for day to day use.
01:09:21 But let’s say you lose your phone or something.
01:09:23 Now, there has to be a third key.
01:09:25 And that’s where you could store it in a backup somewhere,
01:09:29 like in Google Drive or iCloud.
01:09:31 You could trust a third party that’s
01:09:34 not Coinbase to also have that one key.
01:09:36 And they can’t do anything unilaterally with that one key.
01:09:39 So that’s a simple example.
01:09:40 You can get way more complicated.
01:09:42 Yeah, that’s an awesome idea.
01:09:43 So if your funds get seized, Coinbase can’t do anything.
01:09:49 But you better not lose your phone, maybe, in that case.
01:09:52 Yeah, yeah.
01:09:54 But it provides a, there is, so even if you lose your phone,
01:09:56 then there is a recovery mechanism.
01:09:57 Because you can get the one key from Coinbase,
01:09:59 the one from your backup provider,
01:10:01 and recover a new one back on your phone.
01:10:03 I know, yeah.
01:10:04 But what if Coinbase is no longer,
01:10:06 but because of government, because of, say,
01:10:09 it’s in North Korea, government says you’re no longer,
01:10:12 like Coinbase is shut down in that country
01:10:14 or something like that.
01:10:15 Then you can get it, even if you have access to those two.
01:10:19 So again, perhaps a silly question,
01:10:23 but isn’t a self custodial wallet a competitor
01:10:26 as a notion to Coinbase?
01:10:29 No, I mean, so we offer a self custodial wallet.
01:10:33 We’ve built one, and it’s like one.
01:10:34 But doesn’t it bleed the, like I guess
01:10:37 I’m asking a sort of a financial question,
01:10:39 is like how does Coinbase make money on transactions?
01:10:43 So does this not, it does not decrease the number,
01:10:47 or does not significantly negatively affect transactions?
01:10:50 Or are you more focused on growing the number of the pie
01:10:53 of the number of people that are using cryptocurrency?
01:10:56 Yeah, like a traditional financial service firm
01:10:58 would probably say, well, we should be storing,
01:11:01 let’s keep more of the custody with us,
01:11:03 because that’s how we prove to the world
01:11:05 that we’re valuable or whatever.
01:11:07 I don’t really believe that.
01:11:08 Like I think that actually we kind of want to encourage
01:11:10 our users to move to self custody over time
01:11:13 for those who are ready and willing.
01:11:15 And that technology needs to mature.
01:11:16 I’m not trying to like force anybody to do it
01:11:18 who doesn’t want to do it.
01:11:19 But to me, that’s like the future
01:11:21 of how we get billions of people using crypto.
01:11:23 But doesn’t that mean they can go somewhere else easier?
01:11:27 Yeah, that’s sort of the point is like,
01:11:29 we’re all using the same protocol.
01:11:31 So there’s low switching costs,
01:11:32 which keeps all the companies accountable, right?
01:11:34 Like if you want to access the visa network,
01:11:38 there’s only one company in the world
01:11:39 you can go through to do that, like visa.
01:11:41 But if you want to access the Bitcoin network,
01:11:43 there’s dozens or hundreds of companies out there
01:11:45 who can do that.
01:11:46 So it’s arguably, you could argue it’s worse for us
01:11:50 as a company, but I think it’s better for,
01:11:53 it’s what makes Bitcoin interesting
01:11:54 and cryptocurrency interesting is that nobody controls it.
01:11:58 There is low switching costs for customers.
01:11:59 It’s better for customers.
01:12:01 And that means that all the companies in the space
01:12:03 are going to be held to a high standard
01:12:04 because the minute you lose someone’s trust,
01:12:06 they’re just going to move their Bitcoin to some other service
01:12:08 and that’s good for the world.
01:12:10 Do you think of Coinbase as,
01:12:12 so there’s these ideas of layer one,
01:12:14 layer two, layer three technologies.
01:12:17 Do you think of Coinbase as layer one,
01:12:20 layer two, layer three?
01:12:21 Now that said, there’s so many products
01:12:27 that are under the Coinbase umbrella
01:12:28 that it’s hard to answer that question,
01:12:30 but what do you think?
01:12:31 Do you acknowledge the existence of layer three?
01:12:34 So, you know, usually when people are using those terms,
01:12:38 layer one, layer two, so they’re referring to like,
01:12:40 layer one would be the blockchain,
01:12:42 layer one blockchain itself,
01:12:43 like a Bitcoin or Ethereum or something,
01:12:45 not like a centralized service like Coinbase
01:12:48 or even our decentralized self custodial wallet.
01:12:51 So yeah, I wouldn’t consider us to be like a layer one.
01:12:56 These are the decentralized protocols
01:12:58 that we’re integrating, but Coinbase itself is not those.
01:13:01 Yes, but layer two is the thing that was basically
01:13:05 doing transactions without the settlement on the blockchain.
01:13:09 And so you get to have some of the benefits
01:13:11 of faster transactions without the security
01:13:15 associated with the blockchain.
01:13:16 And layer three is, I suppose,
01:13:20 sort of apps built on top of that.
01:13:23 So, you know, at least I think talking to Michael Saylor,
01:13:26 he considers Coinbase a layer three technology.
01:13:29 Interesting, okay.
01:13:31 I’m not really particularly familiar
01:13:34 with this kind of distinction of layer three and two.
01:13:37 I don’t see them as fundamentally different.
01:13:40 But some of the, okay, I mean, one way of asking that,
01:13:44 is there some layer two like of magic happening
01:13:48 in order to make transactions associated
01:13:50 with the blockchain happen instant, so that they’re quick?
01:13:55 So that.
01:13:56 On Coinbase?
01:13:57 On Coinbase, yeah.
01:13:58 Is there some magic going on?
01:14:00 Because you’re, okay, we should say,
01:14:01 how many cryptocurrencies are currently on Coinbase?
01:14:04 So it’s more than two.
01:14:06 Yeah.
01:14:07 It’s a lot more than two.
01:14:08 Yeah.
01:14:09 So you have to understand,
01:14:10 they have to incorporate all these technologies.
01:14:12 Yeah.
01:14:13 So how do you make that magic
01:14:16 of sort of universal transactions happen
01:14:18 across all of these different cryptocurrencies?
01:14:23 There’s our centralized products
01:14:24 and decentralized products, right?
01:14:25 The centralized products, we are storing that crypto for you.
01:14:31 And so if you’re moving from one of your accounts
01:14:33 to another account, like an ETH1 account to ETH2 account,
01:14:36 or from my ETH Coinbase centralized account
01:14:39 to your ETH centralized.
01:14:40 So we can do that transaction off chain to make it faster.
01:14:43 And it saves the customer fees
01:14:45 and it just confirms instantly.
01:14:47 But it’s not truly using the decentralized blockchain,
01:14:49 right?
01:14:50 So you can also send any Bitcoin address
01:14:52 or Ethereum address, for instance.
01:14:53 And that is putting the transaction on chain.
01:14:56 Now our decentralized products like Coinbase wallet,
01:14:59 the self custodial wallet,
01:15:01 every transaction is happening on chain with that.
01:15:03 And so basically it just shows a little bit
01:15:05 of the evolution of Coinbase and the blockchains themselves.
01:15:07 Like in the early days, these networks were not scalable.
01:15:13 And so there were no L2 solutions, for instance.
01:15:16 And so we had to do sort of these hacks,
01:15:18 like moving the crypto off chain,
01:15:20 if you were moving between your own accounts
01:15:21 and stuff like that.
01:15:22 Otherwise the minor fees would have just eaten us alive
01:15:24 as a company, right?
01:15:25 Yeah.
01:15:26 But now the blockchains are starting to scale.
01:15:29 There’s a whole bunch of more work
01:15:29 that needs to be done on that.
01:15:30 And we’re getting L2 solutions.
01:15:32 So I think more and more of the transactions
01:15:33 are going on chain, whether it’s L2, L1.
01:15:36 And ideally we shouldn’t be doing that many transactions
01:15:43 off chain, just internal Coinbase ledger or something.
01:15:47 That’s not really in the spirit of crypto.
01:15:48 So when you say on chain, that includes layer two technology
01:15:54 that the blockchain proposes.
01:15:56 Yeah.
01:15:59 I guess I was asking how much fun magic is happening
01:16:02 off chain within Coinbase.
01:16:04 And you’re saying in the early days you had to,
01:16:07 but you’re trying to do less and less.
01:16:09 So look, there’s a bunch of high frequency traders
01:16:11 that use the centralized products
01:16:13 and even just regular retail people,
01:16:15 they don’t want to pay the gas fees and stuff.
01:16:17 And they’re trying to, it actually,
01:16:19 we back at the envelope, calculated this out at one point
01:16:24 and just like, it would be completely infeasible
01:16:26 for like high frequency traders
01:16:28 to put everything on chain at this point.
01:16:29 That’s basically what DEXs are doing.
01:16:31 And so both are important.
01:16:33 I think more and more is going to move decentralized
01:16:35 over time, which is great.
01:16:36 And we’re, and we’re basically.
01:16:38 DEXs are decentralized exchanges by the way.
01:16:40 Yeah.
01:16:42 So anyway, we want to encourage more and more of it
01:16:45 to move decentralized over time,
01:16:46 but I don’t, the centralized things aren’t going away
01:16:48 for like a long time.
01:16:50 It’s a decade from now,
01:16:51 there’s going to be some big institution
01:16:54 or pension fund or central bank.
01:16:56 That’s like, all right, we got to hold crypto.
01:16:58 Let’s set up the account in a centralized way.
01:17:00 So that’s, that’s fine.
01:17:02 Both, both are important.
01:17:03 Do you know the number
01:17:04 of cryptocurrencies currently on Coinbase?
01:17:07 Do you know that number?
01:17:08 It’s over a hundred, but it depends.
01:17:10 It depends what jurisdiction you’re in.
01:17:12 And, you know, are you in institution versus retail?
01:17:16 There’s like, there’s so many different categories now.
01:17:19 But over a hundred.
01:17:20 Yeah.
01:17:21 So what does it take to become, to, to, to become an asset,
01:17:25 to become a cryptocurrency on Coinbase,
01:17:28 to add your technology to Coinbase?
01:17:33 Okay. Well, so we’re trying to get away from this idea
01:17:36 of being listed on Coinbase as being seen as like
01:17:39 an endorsement or something,
01:17:40 because I actually think it’s very important
01:17:42 that we are not considered judge and jury about, you know,
01:17:47 like imagine it was the early days of the internet
01:17:49 and you were like, what’s a good webpage
01:17:50 and what’s a bad webpage.
01:17:51 Like you would have been totally wrong
01:17:52 or anytime big tech companies try to make these review,
01:17:57 review boards of like, you know,
01:17:58 Apple famously gets in trouble for this a lot
01:18:00 with their app store review process.
01:18:02 Right.
01:18:02 And so something that you think like a committee of people
01:18:06 somewhere thinks looks silly may turn out
01:18:08 to be the next big thing.
01:18:08 Right. And so it’s very difficult.
01:18:10 So what do we do?
01:18:11 We basically have a test of legality, right?
01:18:15 We check, you know, do we believe this is a security?
01:18:19 If so, it can’t be listed on Coinbase
01:18:21 and there’s a very rigorous process we go through for that.
01:18:25 Just currently the way the laws are in the US,
01:18:26 you can’t do that.
01:18:27 And we’ve been, we acquired a broker duo license
01:18:30 from the SEC.
01:18:31 We’re trying to work with them to get that operational
01:18:32 and hopefully someday we can trade real crypto securities.
01:18:35 But today that’s not possible in the US at least.
01:18:38 Then we look at sort of the cybersecurity
01:18:40 of the crypto asset.
01:18:42 Does it, do we see that there’s some flaw
01:18:44 in the smart contract or, you know,
01:18:47 a way that somebody could manipulate it
01:18:49 without the customer’s permission?
01:18:52 We look at some compliance pieces to it as well,
01:18:54 like the actors behind it and like, you know,
01:18:57 there any kind of criminal history, anything like that.
01:19:00 But if we believe it meets our listing standards,
01:19:02 basically this test of legality and everything
01:19:06 for customer protection, then we want to list it
01:19:09 because we want the market to at that point decide.
01:19:11 And it’s kind of like Amazon or something like that
01:19:16 where, you know, a product might have three stars
01:19:18 or it might have five stars,
01:19:19 but if it starts to get one star consistently,
01:19:22 like it’s probably a fraudulent or it’s defective
01:19:24 or something like maybe Amazon will remove it.
01:19:26 But otherwise you want to let the market decide
01:19:29 what these things are.
01:19:31 So that’s generally how we do it.
01:19:32 And by the way, more and more of these assets,
01:19:36 I think especially like low market cap assets
01:19:38 are going to be traded on DEXs through Coinbase.
01:19:40 It’s not that we,
01:19:42 we don’t need to list every asset on a centralized exchange.
01:19:45 I think DEXs are really good for the long tail.
01:19:47 And then it becomes an even,
01:19:49 it’s even more clear to people,
01:19:50 like this is not some endorsement by a Coinbase of like,
01:19:53 this asset’s good and this one’s bad.
01:19:55 Like, you know, my belief is there’s going to be millions
01:19:57 of these assets over time.
01:19:59 And so I hope it doesn’t like make news
01:20:02 every time we add one in the future, basically.
01:20:03 Yeah, I wonder how you get there
01:20:05 because I, even I look to Coinbase for, for example,
01:20:10 you know, people, as you can imagine,
01:20:13 sort of tag me on Twitter or something like that
01:20:15 and all that, like you should interview our sort of this,
01:20:20 the founder of this particular coin, right?
01:20:23 Yeah.
01:20:23 And I, it’s so hard for me to know what’s,
01:20:27 first of all, what’s interesting technology?
01:20:30 What’s, who’s a scammer or not?
01:20:34 Who’s actually legitimately representing
01:20:37 an ambitious new thing versus a scam?
01:20:43 And I, you know, there’s very few sources
01:20:46 of like a verification signal.
01:20:50 And unfortunately Coinbase in part
01:20:52 has become a little bit of that too.
01:20:55 And you’re trying to get away from that
01:20:57 because you’re trying to get as many,
01:20:58 sort of let the people decide.
01:21:00 So you’re thinking of like Amazon star type system
01:21:03 where the people could rate.
01:21:05 Yeah, so I think we’ll actually probably add
01:21:07 like user ratings and reviews.
01:21:09 So, and we’ll be very cautious about like, you know,
01:21:12 these are real people.
01:21:15 There’s a bunch of stuff we have to do for that already.
01:21:17 So I think wisdom of the crowds is good
01:21:19 in terms of getting feedback on items,
01:21:21 but we also, we’re gonna do our own review,
01:21:24 which I mentioned earlier, right?
01:21:25 Which is like, okay, it meets this minimum bar
01:21:27 to be listed on our site.
01:21:28 Yeah.
01:21:30 I think, yeah, both are important.
01:21:32 How do you know if a coin is a scam or not?
01:21:36 Well, you can see a few things.
01:21:39 So, you know, I hate to use the word scam
01:21:41 because a lot of these are judgment calls.
01:21:42 You gotta, I kind of, a court may or a jury
01:21:45 may land either way,
01:21:45 but things that would be red flags to look at would be,
01:21:50 you know, is a bunch of the asset owned by an insider
01:21:53 or insiders with short vesting periods.
01:21:56 You know, does the background of the founders,
01:22:02 like they may have criminal records
01:22:04 or if they’ve perpetrated other frauds in the past, right?
01:22:08 There’s a difference between something
01:22:10 which is just a me too product.
01:22:13 It’s like, it doesn’t have anything interesting about it
01:22:16 and something that’s an actual fraud or outright scam.
01:22:18 And you have to, a lot of this data,
01:22:21 what’s cool about it is that it’s now available on chain.
01:22:23 You can look at like the tokenomics behind it
01:22:25 and see who owns it.
01:22:26 And are they selling it, you know, in like inappropriately
01:22:32 or are they pumping it on like YouTube and Twitter
01:22:35 and making promises about,
01:22:38 hey, the value of this thing may be a higher in the future.
01:22:40 And like, all those are just big, big no, no’s
01:22:42 that we would, you know, we just don’t wanna go there.
01:22:45 So our whole thing is like,
01:22:48 we want to enable innovation in this space,
01:22:50 but not allow anybody to curtail the advancement
01:22:54 of this industry by like doing some kind of fraudulent thing
01:22:57 or get rich quick thing.
01:22:58 So.
01:22:59 It’s a tricky industry
01:23:00 because I’m trying to figure out who to, you know,
01:23:03 what’s interesting to understand, to research.
01:23:07 And it’s hard to know.
01:23:09 Let me ask you about a tricky one
01:23:11 to add to a centralized exchange,
01:23:13 which is privacy preserving cryptocurrency.
01:23:16 So like Monero.
01:23:17 Yeah.
01:23:18 Is that technically difficult or is that why,
01:23:21 why is like Monero, for example, forget that specific one,
01:23:24 but like privacy preserving cryptocurrency blockchains,
01:23:29 why is that, is that ever possible to add?
01:23:33 So that’s a great question.
01:23:35 So the answer is maybe.
01:23:36 So here’s the reason why.
01:23:40 So because we’re a regulated financial service business,
01:23:43 we have various licenses to do that.
01:23:46 We are regulated by various regulators.
01:23:48 Part of those licenses requires us to have a quote,
01:23:51 reasonable program to monitor for suspicious activity,
01:23:57 you know, an AML program, anti money laundering, right?
01:23:59 And so if it, if a coin is a hundred percent anonymous
01:24:03 and we can’t really do blockchain analytics
01:24:05 to track source of funds
01:24:07 and where these things might be going,
01:24:09 it makes it harder to have a reasonable program around that
01:24:15 that’s defensible.
01:24:16 Now there are privacy preserving coins like Zcash,
01:24:19 which have something called a view key.
01:24:21 And a view key is basically another key
01:24:23 which allows you to deanonymize the transactions
01:24:26 in specific situations where you want that.
01:24:28 So for instance, you know, we do support Zcash.
01:24:30 And one of the ways we got comfortable with that
01:24:32 is that when you’re buying it on Coinbase,
01:24:36 you know, you can basically have a view key.
01:24:38 The transactions are not anonymous while you’re buying it.
01:24:41 And we can see where it goes afterwards
01:24:42 and do our whole standard program.
01:24:45 Now, if it gets a few hops away down the road,
01:24:48 I mean, people could eventually turn on
01:24:50 privacy preserving aspects.
01:24:51 So, you know, these are tough judgment calls,
01:24:53 but at least in terms of our interaction
01:24:55 with the customer and everything,
01:24:56 we feel comfortable at that.
01:24:58 I think there’s a broader point here,
01:25:00 which is that I actually think privacy coins
01:25:03 are a good thing for the world and they should be allowed.
01:25:05 And more like, you know, despite,
01:25:08 we’ve made this judgment call to operate
01:25:10 in a regulated and safe and compliant way,
01:25:11 but just taking my Coinbase hat off for a minute,
01:25:15 I think the world would be a better place
01:25:17 if there were more privacy coins,
01:25:19 because it’s kind of like the internet
01:25:20 when it first came online, like there was no HTTPS,
01:25:24 everything was HTTP and there was, you know,
01:25:26 so people were afraid to put their credit cards
01:25:28 on the internet and your messages could be intercepted
01:25:31 and all this stuff.
01:25:32 And now the whole internet has basically moved to HTTPS
01:25:34 with a little lock icon in your browser, which is better.
01:25:37 Like, and financial information
01:25:39 is like the most important information to keep private,
01:25:41 right?
01:25:42 So there’s times where like,
01:25:44 let’s say you’re running a charity or something
01:25:46 and you want to have total auditability,
01:25:47 transparency for the whole world,
01:25:49 who donated and where did the money go?
01:25:51 That’s great, you want it to be public.
01:25:53 But if it’s like your personal money or something like that,
01:25:56 you don’t want to be broadcasting that to the whole world.
01:25:58 And in some ways that’s what blockchains are doing,
01:26:00 you know, pseudonymously,
01:26:01 because like, but it is a public ledger.
01:26:03 And so if you can know who owns each address,
01:26:05 you can basically deanonymize it.
01:26:07 I, you know, I think basically people should fight
01:26:11 for privacy and freedoms of all kinds,
01:26:13 but privacy of money is a good thing.
01:26:16 So I would like to see more of that in the future.
01:26:17 You chosen with Coinbase to have a seat at the table
01:26:23 with the regulators.
01:26:25 So what kind of conversations are there at that table?
01:26:31 What are the regulations like?
01:26:33 What is the level of understanding with regulators?
01:26:36 What are they worried about?
01:26:38 What are they thinking about?
01:26:39 What are the positive and what are the negative regulations
01:26:42 that you’re facing?
01:26:44 That you’re educating, struggling with, pushing back on,
01:26:48 supporting, all that kind of stuff.
01:26:49 Yeah.
01:26:51 Oh man, there’s so many.
01:26:52 Cause we’re, I mean, we’re live in like, you know,
01:26:55 maybe a hundred countries or more at this point.
01:26:56 So the conversations are all over the map.
01:26:59 I’m trying to think what broad strokes I could paint for you.
01:27:02 So I’d say one trend that’s positive is that basically
01:27:06 regulators around the world are more and more,
01:27:09 over the last five years, I would say,
01:27:11 it’s more and more common to find a regulator today asking,
01:27:15 how can we preserve the innovation potential
01:27:17 of this technology while keeping the bad actors out
01:27:21 than it was five years ago, where they were saying,
01:27:23 this is all bad activity.
01:27:24 How do we prevent it?
01:27:25 And so maybe this is.
01:27:28 When you say more and more, what fraction?
01:27:34 I’ll give you like a US specific example,
01:27:36 although we operate in many countries.
01:27:38 So when I go to DC now, I would say, you know,
01:27:42 50, 60% of the people who I meet with are basically,
01:27:46 you know, they’re in the camp of crypto,
01:27:49 has a lot of potential.
01:27:50 We should regulate it to make sure the bad people
01:27:52 don’t do something bad with it.
01:27:53 But this is here to stay and it has a lot of upside.
01:27:56 We should basically create the awful regulation
01:27:59 and celebrate it and actually encourage this innovation
01:28:01 to happen in the US.
01:28:03 That’s a huge change from just three years ago
01:28:06 where it was probably 30% of people saying that.
01:28:08 Now it’s like 60, it’s like almost double.
01:28:10 It’s getting harder to find like true crypto skeptics
01:28:13 in DC.
01:28:15 I’d say that, you know, maybe only like 20 or 30% of people
01:28:19 are like willing to say something negative.
01:28:21 Like they actually think it’s net negative.
01:28:23 It’s like, it’s really hard to defend that position
01:28:25 at this point, because almost like one in five Americans
01:28:28 have used or tried crypto at this point.
01:28:30 So you’re kind of condemning 20% of your fellow citizens
01:28:32 if you say that at this point, you know,
01:28:36 especially with NFTs and all these things,
01:28:37 like a huge segment of people who don’t even care
01:28:39 about investing or whatever came into the space.
01:28:41 So, and then basically that’s that same conversation
01:28:45 is happening, but, you know, delayed by a few years
01:28:49 in like India and Europe and in some Asian countries.
01:28:53 And some countries have really embraced crypto
01:28:56 and they’re like trying to really,
01:28:59 they’re ahead of where the US is
01:29:00 because they’re trying to actually attract
01:29:03 the best startups and entrepreneurs like, you know, like Dubai
01:29:06 and UK and Australia and all are kind of pushing
01:29:08 good regulation, El Salvador actually, I guess,
01:29:11 adopted it as like Bitcoin as a legal tender.
01:29:13 There was another country, Central African Republic,
01:29:15 I think that is supposedly did that as well.
01:29:18 But, you know, there’s countries like China
01:29:20 that are more autocratic that are saying,
01:29:22 hey, this is a threat to our power
01:29:24 and like, we’re gonna try to really curtail it.
01:29:26 So what kind of regulations are there that you feel the most
01:29:30 that are limiting or that are empowering?
01:29:33 Like, is there specific examples?
01:29:35 Yeah, okay.
01:29:36 So, I mean, basically I think the securities laws
01:29:39 in the US need to be clarified about what,
01:29:44 crypto is many different things.
01:29:45 That’s what people don’t realize.
01:29:46 So like some crypto, like Bitcoin, Ethereum
01:29:49 and many others are probably more like commodities.
01:29:53 They’re not controlled by any one person, you know,
01:29:55 like anyway, there’s people who wanna raise money
01:29:58 for a company that’s sounds more like a security
01:30:00 that should be regulated by the SEC.
01:30:02 Commodities are regulated by the CFTC.
01:30:04 Then there’s some cryptocurrencies
01:30:06 which are more like currencies,
01:30:08 like stable coins and central bank digital currencies.
01:30:10 And those are probably, you know,
01:30:12 should be regulated by the treasury or someone like that.
01:30:15 And then there’s a whole another category
01:30:16 of cryptocurrencies, which are none of those things.
01:30:18 They’re NFTs like artwork or they’re metaverse items
01:30:21 or decentralized identity and voting.
01:30:23 And so I think that there’s a very unhelpful point of view
01:30:28 out there by some folks, which is,
01:30:31 hey, this is all, most of this is like bad activity.
01:30:34 We need to shut it down.
01:30:35 So we’re just gonna pursue enforcement actions
01:30:38 or something like that.
01:30:39 Most people in DC don’t feel that way anymore.
01:30:41 And I think the people of the US don’t feel that way anymore
01:30:43 because a lot of them are using this stuff.
01:30:45 And their general view is,
01:30:47 there’s a lot of upside potential here.
01:30:48 We can all agree, let’s get rid of the fraud and the scams.
01:30:51 We all wanna get rid of that.
01:30:52 So let’s create a relatively simple test, which says,
01:30:56 if it’s like nobody controls more than 20% of it
01:31:02 or some threshold, it probably is more like a commodity.
01:31:05 If someone’s raising money for,
01:31:07 they’re selling this thing for a business,
01:31:09 then it’s probably a security.
01:31:11 And then if it’s more like a medium of exchange,
01:31:14 it’s a currency.
01:31:15 And if it’s none of those things,
01:31:16 maybe it’s artwork or whatever,
01:31:18 a legal test like that would help clarify who,
01:31:21 which regulator is regulating what.
01:31:23 And then we also wanna have probably like a sandbox
01:31:26 for innovation where if you’re a startup
01:31:29 and you’re doing less than, I don’t know, some number,
01:31:33 less than some amount of payment volume
01:31:34 or customer funds you’re storing,
01:31:36 it’s like just let those things get off the ground
01:31:38 without a soul crushing amount of legal bills
01:31:42 and uncertainty.
01:31:42 So if the US can get there, that would be great.
01:31:46 I think a bunch of other countries now are rushing
01:31:47 around the world to sort of create that regulation
01:31:50 that does attract innovation.
01:31:52 And so in the international bodies like IMF and G20
01:31:57 and stuff, they’re starting to look at proposed regulation.
01:32:00 I hope that Coinbase and a bunch of other crypto companies
01:32:02 can help in that conversation too.
01:32:03 We have a whole policy effort.
01:32:04 I think actually crypto policy efforts
01:32:07 are like probably one of the biggest things
01:32:08 in DC right now.
01:32:09 So it moves slow at the speed of government,
01:32:13 but yeah, and in the meantime,
01:32:16 we’re just trying to help more and more people use crypto
01:32:18 because ultimately that’s what, in the democracies,
01:32:20 that’s what they care about.
01:32:22 Like they’ll do what the people of the country want.
01:32:24 So you want governments to start understanding
01:32:27 differences between, in the crypto space,
01:32:29 commodities, securities, currencies, NFTs.
01:32:32 I still don’t understand.
01:32:34 What are they supposed to make sense of NFTs?
01:32:37 What is NFTs exactly from a perspective of a regulator?
01:32:41 Yeah, so.
01:32:42 Is it the other categories?
01:32:44 Yeah, most NFTs you could think of as like artwork,
01:32:47 although it’s, who knows where it’s gonna go.
01:32:49 It could be.
01:32:49 You mentioned Metaverse, right?
01:32:50 You mentioned some kind of unique identity of a thing.
01:32:54 Yeah, like there’s people selling virtual land in NFTs.
01:32:59 I actually, I bought this NFT that’s like,
01:33:02 it’s like citizenship in this like city, Dow in Wyoming.
01:33:05 Like I’ve never been there,
01:33:06 but it’s almost like a badge or an attestation
01:33:11 like to get access to this location.
01:33:14 There’s like people doing like tickets to events.
01:33:17 Like, you know, they’re called a POAPs.
01:33:19 Like proof of attendance and things like that.
01:33:23 So it’ll be very interesting to see where NFTs go over time.
01:33:27 It could get, and that’s the danger.
01:33:29 You don’t wanna try to like define the regulation
01:33:31 if you don’t even know where this thing’s gonna go, so.
01:33:33 And so your efforts in the policy arm is education?
01:33:37 Yeah, education, advocacy.
01:33:39 We’re just trying to be like a helpful educational resource
01:33:42 essentially, and then if they give us feedback
01:33:43 and they’re like, hey, don’t do this or don’t, or do this,
01:33:46 like we’re more than happy to do anything that’s requested.
01:33:50 We generally go get licenses
01:33:52 and we’ve just tried to do the right thing
01:33:53 in the absence of clarity,
01:33:54 because if it’s not clear what the law says,
01:33:59 then you should just basically do good things
01:34:01 that you think may be required in the future
01:34:02 to show good faith effort towards the right thing.
01:34:05 And that’s part of like innovating in a regulated field,
01:34:08 which is, you know, a whole topic in itself.
01:34:11 So if you are at the table,
01:34:13 let me, this is less the case in the United States,
01:34:17 but can government agencies seize a person’s cryptocurrency
01:34:20 by forcing Coinbase to hand it over?
01:34:24 So when you’re centralized,
01:34:26 they have a phone number to call.
01:34:28 Okay, so this is a complicated topic.
01:34:31 Like if you really wanna be sure that,
01:34:34 this is why people wanna store their own crypto, right?
01:34:36 Like with self custodial wallets,
01:34:37 like with Coinbase wallet embracing decentralization,
01:34:40 they wanna avoid that.
01:34:42 Now in the US, there is rule of law, right?
01:34:44 So we have reasonable protections in place around
01:34:48 like search and seizure and things like that.
01:34:51 You know, Coinbase does,
01:34:52 we publish transparency reports on this.
01:34:54 We get subpoenas, court orders, things like that
01:34:56 from various countries around the world.
01:35:00 And there are situations where we have been ordered
01:35:04 to freeze accounts, things like that.
01:35:08 You know, we have to follow the law,
01:35:09 is another way to put it.
01:35:11 We’re a regulated financial service business and so.
01:35:13 If the money is used as part of breaking the law,
01:35:16 that’s what that, in a particular jurisdiction,
01:35:20 in a particular.
01:35:22 Right, and then the other thing,
01:35:23 sometimes we will actually get court orders
01:35:25 or subpoenas that are overly broad.
01:35:27 We’ve seen, so they need to follow due process, right?
01:35:30 And so we’ve seen some in the past that were like,
01:35:34 well, we need you to freeze this huge number of accounts.
01:35:36 And it’s like, well, we’ll actually have gone to court
01:35:39 and like pushed back on some of these and said like,
01:35:40 what is your probable cause?
01:35:42 And has the threshold been met?
01:35:44 And like, we’ve won some of those cases
01:35:45 on behalf of our customers.
01:35:46 So yeah, it’s actually really,
01:35:50 it’s kind of unfortunate and frustrating.
01:35:51 As a large business, you spend a lot of resources
01:35:54 basically interacting with inbound requests
01:35:59 by all kinds of lawyers and people and requesting things.
01:36:03 And some of them are silly and ridiculous
01:36:06 and you have to push back and say no.
01:36:07 And so it’s kind of a tax on every company at a certain size
01:36:11 which ultimately gets passed on to the customer
01:36:14 in higher fees.
01:36:15 So you have to employ armies of lawyers
01:36:17 to deal with this stuff.
01:36:18 Can you educate me on something?
01:36:19 How much innovation is there in the legal space?
01:36:23 So for lawyers working with Coinbase
01:36:26 because it’s such a new cutting edge thing.
01:36:30 So you’re, there’s a lot of gray area
01:36:33 you’re supposed to be operating under.
01:36:36 Like how hard is it being a lawyer at Coinbase?
01:36:41 Like how much precedence is there?
01:36:43 I guess is what I’m asking.
01:36:44 I mean, just like you said, three years.
01:36:47 It’s kind of a new space.
01:36:49 Yeah, well, it’s probably very hard
01:36:51 to be a lawyer at Coinbase and very fun
01:36:53 because whenever you’re in a new field that’s growing fast,
01:36:57 there isn’t a lot of case law and just precedent set.
01:37:02 So that’s also an opportunity for you
01:37:04 to go create that stuff.
01:37:05 And that’s what a lot of legal careers are made out of
01:37:07 is like take a complex situation
01:37:09 where you have to balance difficult things.
01:37:11 Like how do we prevent bad activity
01:37:13 but still enable an innovation?
01:37:14 That’s a hard question.
01:37:15 And there’s, you can go draft legislation
01:37:18 and circulate it to policymakers
01:37:19 or come up with these policies
01:37:21 and how do you operate a business in an environment
01:37:25 where the law is just unclear, right?
01:37:27 It’s like try to do the right thing,
01:37:31 but like strike the right balance.
01:37:33 So yeah, a lot of our lawyers have to come up with that.
01:37:36 Very creative stuff.
01:37:37 You mentioned one of the things you’re focused on
01:37:39 is expanding the number of people,
01:37:41 maybe a billion people on Coinbase or using cryptocurrency.
01:37:46 Where are we at now?
01:37:47 How do we get to a billion?
01:37:49 As of Q4 last year,
01:37:50 we had 89 million verified accounts on Coinbase,
01:37:53 but in any given quarter, only maybe like 10
01:37:59 or a little more million of those are like really active.
01:38:02 So, and then if you look at globally,
01:38:04 I think some of the estimates I’ve seen
01:38:06 is maybe there’s like 200 million people
01:38:08 or something like that who have ever used or tried crypto.
01:38:11 So we’re a long, you know, we’re ways from a billion,
01:38:15 but it’s not like that far off.
01:38:18 How do you get there?
01:38:19 How do you get to a billion?
01:38:21 So a few things.
01:38:22 One is the blockchains have got to become
01:38:23 way more scalable.
01:38:26 It’s kind of like we’re all running dial up modems
01:38:28 and we need broadband.
01:38:29 And so it’s just like too expensive, too slow
01:38:32 to do all these transactions.
01:38:33 And I think if we just get L2s working and scalability,
01:38:37 you know, we’ll see another order of magnitude
01:38:39 kind of come out just from that.
01:38:42 I think the second one would be more clear regulation.
01:38:44 That would help a lot.
01:38:46 I do talk to, you know, pension funds
01:38:49 and you know, various asset managers,
01:38:52 sovereign wealth funds and stuff.
01:38:53 And a lot of them tell me,
01:38:55 we’ve got 1% of our portfolio in crypto today,
01:38:58 but we really would rather have like 20% in there.
01:39:02 But what we’re waiting for is more clear regulation
01:39:06 coming out and saying that clear test that I was saying,
01:39:08 these assets are commodities regulated by SCPC,
01:39:11 these are by SCC, these are by treasury, whatever.
01:39:13 So that would be a big unlock.
01:39:15 Do transactions.
01:39:16 So one of the things that you mentioned, payments, sorry.
01:39:20 Yeah.
01:39:21 Well, does that unlock a lot of users?
01:39:25 Yeah, it does.
01:39:26 I mean, remittance is like a huge thing.
01:39:28 People sending money home to their families
01:39:30 in other countries where the fees are super high.
01:39:32 So yeah, if we get blockchains to be more scalable
01:39:35 and there’s more global adoption,
01:39:37 like I think we’ll see remittance quarters
01:39:40 move over to crypto a lot.
01:39:42 There’s also just,
01:39:43 the other thing that’s driving a lot of crypto adoption
01:39:45 is basically the creation of more and more third party apps.
01:39:49 So, or dApps they’re sometimes called decentralized dApps.
01:39:52 So a lot of startups now, you know,
01:39:55 how like you used to use in the early 2000s,
01:39:57 they called them.com startups,
01:39:58 but now you don’t need to say.com
01:39:59 cause everybody’s using the internet.
01:40:01 And so now there’s like hundreds or thousands
01:40:04 of these crypto startups,
01:40:06 but I think in the future,
01:40:06 you won’t need to call them crypto startups
01:40:08 cause they’ll just be called startups
01:40:09 cause everyone’s using the internet and crypto and whatever.
01:40:11 So anyway, the use cases,
01:40:14 the utility of crypto is getting better and better
01:40:17 with like all these third party apps
01:40:19 getting funded and created.
01:40:20 And do you think there’s going to be a killer
01:40:22 or a set of killer dApps,
01:40:24 like a thing where nobody can live without?
01:40:27 Are we still waiting for that?
01:40:29 There’s going to be a bunch of them.
01:40:30 It’s just like, it’s like the internet,
01:40:31 like what were the killer web companies, you know,
01:40:33 like Uber and Wikipedia and Airbnb and Google.
01:40:37 And like, so there’s going to be some big winners,
01:40:40 but there’ll be thousands of,
01:40:42 this is basically the new,
01:40:45 it’s like what happened with the.com startups
01:40:46 in the early 2000s.
01:40:47 It’s like a lot of the best entrepreneurs
01:40:49 are building crypto startups now.
01:40:50 So tons of venture money flowing into the space.
01:40:54 A lot of smart young people, so.
01:40:55 Do you think Bitcoin or some other cryptocurrency
01:40:57 will become the reserve currency of the world at some point?
01:41:01 Cause this is kind of a controversial idea,
01:41:03 but I actually think yes.
01:41:06 I do think Bitcoin could end up becoming
01:41:08 a reserve currency of the world.
01:41:10 So I’ve been reading Ray Dalio recently
01:41:14 with his new book, like The Changing World Order.
01:41:16 And I thought it was a really well researched book.
01:41:19 He talks in there, he looks back at history, right?
01:41:21 He looks at like empires and going back
01:41:25 to various Chinese empires, the Dutch and Ottomans
01:41:27 and everybody, and how did they rise?
01:41:29 And they were able to have the reserve currency
01:41:31 as they rose and what produced that?
01:41:34 Like it came from good education and innovation
01:41:36 and better trade and anyway.
01:41:39 So the US by some measures is kind of looks like it’s,
01:41:44 maybe it’s had a really good run
01:41:46 and it’s coming down a little bit
01:41:47 and China is kind of coming up.
01:41:49 Who knows how that’ll play out, by the way,
01:41:51 like the world is very complicated.
01:41:52 It could, that could switch.
01:41:55 But I guess if the US dollar is gonna be seeing
01:41:59 more inflation in the future,
01:42:01 the Chinese Yuan is not like necessarily better, right?
01:42:05 I mean, they have a ton of debt as well.
01:42:08 And it’s not like you could really,
01:42:13 that the Yuan could be inflated as well, right?
01:42:15 It probably will be.
01:42:17 And so I do think that there’s this group of people today
01:42:19 which probably most traditional, I don’t know,
01:42:24 like the people who run big banks
01:42:27 and like governments and stuff that they’re not,
01:42:28 this is not really on their radar today.
01:42:29 But I think there’s basically a group of younger people
01:42:32 in that kind of 25, 35 year old range who are tech savvy.
01:42:37 They’re starting to think of crypto as like
01:42:39 the primary thing in their financial life.
01:42:42 It’s like, I basically hold my wealth in crypto
01:42:44 and I use dollars or euros or whatever.
01:42:47 If I happen to need something,
01:42:49 I convert it to that at the last minute.
01:42:50 It’s like, if I’m traveling,
01:42:52 I might convert some local currency in the moment,
01:42:54 but that’s not where I hold most of my wealth.
01:42:57 So this segment of the population is not like massive yet
01:43:01 from a GDP point of view,
01:43:02 but I think it’s a leading indicator
01:43:05 of where things could be going.
01:43:06 And this is actually good for the world.
01:43:07 It’s kind of like, especially if China does continue
01:43:10 to rise and it has a more authoritarian view,
01:43:13 it’ll be kind of this very centralized East
01:43:16 versus a decentralized West where people are in the West,
01:43:21 in the free world, really kind of embracing crypto
01:43:24 and a more open, fair, free global financial system,
01:43:27 which I think will be enormously beneficial for humanity.
01:43:31 And I do think basically Bitcoin is the reserve currency,
01:43:33 the gold standard of the crypto economy.
01:43:37 So that’s pretty crazy.
01:43:39 Yeah, the gold standard.
01:43:40 I mean, it’s also like with Ray Dalio,
01:43:43 I feel like China will drive a lot of this,
01:43:47 either in response or directly.
01:43:49 I mean, I think the ruble,
01:43:52 I’m not paying as close attention to the financial systems,
01:43:55 but I think they’re trying to tie it to gold once again.
01:43:59 So that’s an interesting,
01:44:01 maybe it’ll be one of the more authoritarian regime
01:44:04 that will switch to Bitcoin standard first.
01:44:07 And then it’s the West that will,
01:44:11 out of that pressure will catch up
01:44:14 versus the other way around.
01:44:17 It’s fascinating to think of what is the forcing function,
01:44:23 what kind of perturbation is required to switch,
01:44:26 to change anything, honestly, about the financial system.
01:44:28 But it could be, as you’re saying,
01:44:32 just waiting for the people that are young now
01:44:34 that are embracing crypto
01:44:36 to enter the positions of power, essentially.
01:44:41 But I hope that’s not the case,
01:44:42 because if for any innovation we have to wait,
01:44:47 sorry to say, for the older folk to pass away,
01:44:51 that’s not an efficient way to make change.
01:44:54 Yeah, that’s a super interesting topic
01:44:57 of how people’s minds become less plastic as they age.
01:45:02 I guess it’s a feature.
01:45:05 It’s called wisdom,
01:45:06 but then we also need the wild ones to explore,
01:45:09 exploration versus exploitation.
01:45:12 You wrote a blog post that’s really interesting
01:45:14 in September 2020 titled
01:45:16 Coinbase is a Mission Focused Company,
01:45:18 like what we’re talking about.
01:45:20 So one interesting thing you said in that blog post
01:45:23 is that we’re not going to be distracted
01:45:27 by activism within the company
01:45:31 that’s not related to the mission of the company.
01:45:35 Now, that’s a rare thing for a company to state,
01:45:38 for a company CEO to state, especially in this climate.
01:45:44 Can you, first of all,
01:45:46 describe in a little more detail what you meant?
01:45:50 Did you receive blowback for this?
01:45:52 I definitely received some blowback,
01:45:53 but yeah, I’ll describe what I meant.
01:45:55 And if you want to talk about how it came to that too,
01:45:57 we can talk about that.
01:45:58 But what I meant is that there’s a lot of companies right now,
01:46:04 including tech companies, but not exclusively,
01:46:06 where I think like great companies,
01:46:11 they have an important mission.
01:46:12 They’re trying to do something really good for the world.
01:46:15 And unfortunately, they’re getting a little distracted
01:46:17 from that at times because of employee activism
01:46:20 that is causing the company to basically jump
01:46:25 into whatever the current thing is
01:46:26 and try to help is like the positive interpretation.
01:46:30 The negative interpretation would be to virtue signal.
01:46:33 And my view is that this is actually kind of destructive to,
01:46:38 this is largely an American company phenomenon, by the way.
01:46:41 I do worry that this is making America less competitive,
01:46:45 even though I think of myself
01:46:46 as kind of internationally minded,
01:46:47 but I am a US citizen, had my whole life here.
01:46:50 So when we put out this statement,
01:46:54 we had employees that were not in the US
01:46:56 who were confused by it.
01:46:57 They were like, why did Brian need to say that?
01:46:59 It was just saying you’re going to focus on work at work.
01:47:02 That’s what we were doing already.
01:47:04 And there was certain pockets of the US, certain cities,
01:47:08 in particular where we had employees
01:47:10 that a very peculiar cultural phenomenon had evolved
01:47:15 where I think people really wanted the company
01:47:19 they worked at to be almost acting
01:47:24 like the government or something
01:47:25 and like trying to solve the hardest societal issues
01:47:28 and at least have an opinion on it,
01:47:30 if not contribute to the solution
01:47:32 on almost everything.
01:47:35 And for me, it was a very uncomfortable situation
01:47:39 for me as a CEO.
01:47:40 I’d never quite been in this situation
01:47:42 where most of the time when employees in the past
01:47:45 were kind of asking me questions,
01:47:47 they would be asking about like,
01:47:49 how do we make this product better?
01:47:50 Like, what do we do with this competitor?
01:47:52 What about this regulator?
01:47:54 And it got to a place around that time
01:47:56 where most of the questions we were receiving
01:47:59 were I think even about things not related to the company
01:48:02 they were about broader societal issues.
01:48:03 Like Brian, what’s your stance on XYZ controversial thing?
01:48:06 And it was, I often like didn’t have an opinion
01:48:10 on these really hard questions, right?
01:48:12 And I didn’t really,
01:48:13 I felt like it was distracting the company.
01:48:15 People internally were getting into fights a lot too,
01:48:17 like disagreeing with each other.
01:48:19 There was a thing where like the social slack internally
01:48:22 was turning into a social media almost
01:48:24 with people putting in flame wars.
01:48:26 So, and this culminated by the way
01:48:28 with a walkout that happened in the company.
01:48:31 We had received like some demands from employee groups
01:48:34 about various things.
01:48:35 And there was like basically an antagonistic thing
01:48:37 with management and employee.
01:48:38 And I was like, we’re all on the same team here.
01:48:41 If you wanna be antagonistic,
01:48:43 let’s do it with somebody else outside the company,
01:48:46 that we’re trying to improve the world in that dimension.
01:48:48 So yeah, eventually I was like, okay,
01:48:51 the company is not aligned on this.
01:48:53 I just don’t feel, I don’t like the job as CEO, frankly.
01:48:56 Like if the job is to come in here every day
01:48:58 and like have to squirm in front of like the most difficult
01:49:02 societal questions, I don’t think I wanna do that job.
01:49:05 So like either they’re gonna have to go
01:49:06 or I’m gonna have to go.
01:49:08 And I founded this company
01:49:09 and I really believe in the mission.
01:49:10 So they’re gonna have to go.
01:49:11 And what I realized was that,
01:49:14 so I basically, I made an exit package available
01:49:16 to anybody who wasn’t on board with this direction.
01:49:19 5% of employees took it.
01:49:21 I got the company realigned towards this mission.
01:49:23 We’re all here to do work.
01:49:25 By the way, people can, they can go do anything
01:49:27 like political or social activism outside of work.
01:49:29 It’s totally fine.
01:49:30 Like we all, everybody has stuff like that
01:49:33 in their personal life.
01:49:34 But while at work, we can also disagree at work,
01:49:36 by the way, on the work.
01:49:37 You know, this is not like a no disagreement culture.
01:49:39 Like we should, let’s try to get the truth.
01:49:42 But don’t bring stuff into work
01:49:44 that’s just gonna create division.
01:49:46 Make the workplace a refuge from division
01:49:48 about all these crazy things.
01:49:49 And like, we’re all aligned here to work on the mission.
01:49:51 Let’s do that.
01:49:52 Yeah, that was really, really, really refreshing to hear.
01:49:57 So this is me speaking, but there’s a sense
01:50:00 when companies take on these issues publicly
01:50:03 from a CEO position or anywhere else,
01:50:06 that it does seem to optimize for virtue signaling
01:50:10 versus solving a particular problem.
01:50:13 Because to solve a particular problem,
01:50:15 you really have to really put in a huge,
01:50:18 you have to hire a huge number of,
01:50:20 you basically have to create a company with a company
01:50:22 to take on a particular thing.
01:50:25 But if you allow yourself to internally care
01:50:29 about a particular issue,
01:50:30 you’re basically pacifying some number of employee,
01:50:34 like making sure Slack doesn’t get out of hand.
01:50:37 And then you’re doing this kind of, from my perspective,
01:50:40 especially on issues that care about fake virtue signaling,
01:50:43 basically trying to understand
01:50:45 what will make me look the best,
01:50:47 what would make the company look the best
01:50:48 in this particular aspect.
01:50:50 And it just seems very shallow.
01:50:52 And it’s optimizing for the wrong thing,
01:50:54 not for the solving of the problems,
01:50:56 but for the making yourself look like the good guy
01:51:01 and trying to then leverage that to say,
01:51:04 I’m the good guy in all situations.
01:51:07 And it just, it’s the wrong thing.
01:51:09 And perhaps from your perspective as a CEO, as a leader,
01:51:13 it’s also creating division,
01:51:16 unnecessary division within people.
01:51:19 Like they get, yeah, there’s something about us
01:51:21 who gets extremely argumentative about certain topics.
01:51:25 They really bring out the emotion.
01:51:28 And I think that probably, as you were saying,
01:51:30 that emotion is even probably okay,
01:51:33 maybe productive when that emotion has to do
01:51:36 with the mission of the company.
01:51:37 Like you really care about those disagreements
01:51:40 versus like something that has nothing to do
01:51:43 with increasing economic freedom using crypto.
01:51:51 Yeah, it’s fascinating.
01:51:52 But it was so refreshing because it’s rare.
01:51:55 Why do you think that’s a rare?
01:51:57 So the city you’re mentioning,
01:51:59 I mean, there’s a bunch of cities,
01:52:01 but San Francisco is one such city when that culture.
01:52:07 And it’s sad because San Francisco is also,
01:52:12 the Bay Area is also the hub historically
01:52:16 of some of the greatest innovation in human history.
01:52:20 So there’s that tension.
01:52:22 How did that culture emerge there?
01:52:24 Where like the innovation was done by people
01:52:27 that are very mission driven.
01:52:29 You get a bunch of smart people together
01:52:30 to solve a difficult problem.
01:52:32 They get maybe sometimes too much blinders on,
01:52:35 but they try to balance that.
01:52:37 Because it requires that focus to solve an actual problem.
01:52:41 And yet that’s also the place where this culture emerged.
01:52:44 It’s a fascinating human dynamic.
01:52:47 I don’t know.
01:52:48 Somebody will one day tell the history of Silicon Valley,
01:52:52 not just the innovation,
01:52:54 but the social dynamics that occurred there.
01:52:56 Anyway, why do you think that’s so rare?
01:52:59 Well, because people don’t wanna get attacked.
01:53:01 It’s like super, you don’t wanna get canceled, right?
01:53:04 It’s super uncomfortable.
01:53:07 Nobody wants to be called a racist
01:53:08 or whatever people wanna say on Twitter.
01:53:13 Did you get attacked?
01:53:14 Yeah, yeah, I definitely got attacked.
01:53:16 I mean, and I knew it would be controversial.
01:53:17 The only reason I did it, frankly,
01:53:19 was that I was kind of at my wit’s end.
01:53:22 I was like, well, like I said earlier,
01:53:24 like the job, the CEO job sucks.
01:53:26 Like either I don’t wanna do it or they have to go
01:53:29 and I’m gonna make the company into something that I want.
01:53:31 And I’d spent eight or 90 years of my life at that point
01:53:36 kind of building this thing.
01:53:37 I was like, well, I could go start another company,
01:53:39 but it takes a long time to get momentum with these things.
01:53:41 And Coinbase is a very rare thing that happened in the world.
01:53:44 I feel very passionate about it.
01:53:46 So yeah, I’m not gonna go.
01:53:48 Like I need to make this the company that I wanna work at.
01:53:51 And what was really interesting was that
01:53:53 there was such a huge outpouring of support.
01:53:56 So I knew that it would be controversial
01:53:58 and I would get attacked.
01:53:59 And predictably, there was some journalists
01:54:03 and New York Times and all these people
01:54:04 who kind of like went and started writing hit pieces
01:54:06 on the company shortly thereafter.
01:54:09 And they basically just call people who’ve left the company
01:54:12 and can get quotes on whatever they want
01:54:14 and then they’ll write a story.
01:54:16 So mainstream media, I lost a lot of trust
01:54:18 in mainstream media, frankly, after that.
01:54:20 And of course, it’s kind of become obvious since then
01:54:22 that most mainstream media is like hyper politicized
01:54:25 at this point.
01:54:26 It’s basically either super left or super right.
01:54:28 And it’s not really that focused on truth.
01:54:33 So that’s kind of unfortunate
01:54:35 because I think journalism is actually like really important
01:54:37 in society.
01:54:38 So that whole thing got eroded in the US.
01:54:40 Luckily, there’s sort of new media, people like you
01:54:43 and a whole bunch of people.
01:54:44 Did that blog post help that statement,
01:54:47 the 95 people that remained,
01:54:50 is this still something you struggle with?
01:54:52 Because it’s also a culture of the broader tech space.
01:54:56 Okay, so that was an interesting thing, which was that,
01:54:58 so the 95% of people stayed.
01:55:00 I got a huge outpouring of support from people who said,
01:55:05 thank God you finally spoke up and said something
01:55:07 because frankly, it was making it not a very fun place
01:55:10 to work either.
01:55:12 And I realized that there is, I think there was,
01:55:16 I think Nassim Taleb has this blog post
01:55:19 about the tyranny of the 1% or something like that.
01:55:22 But there’s basically a relatively small group,
01:55:24 one in 5% or something like that,
01:55:25 that is really upset about something.
01:55:28 It’s not the majority of the company, it’s like 5%.
01:55:30 There’s another 15% or something that are sympathetic
01:55:33 to the cause.
01:55:34 They’re actually somewhat suggestible.
01:55:35 They will go along with whatever,
01:55:37 because it sounds reasonable.
01:55:38 These are like real issues they’re talking about.
01:55:40 It’s not to say that it’s not real.
01:55:42 And they’ll kind of get swept up in it.
01:55:44 But there’s an 80% of the company that basically
01:55:48 doesn’t agree or just wants to get their work done
01:55:50 without all this drama or distraction.
01:55:52 And they’re afraid to speak up because if they speak up,
01:55:56 they’re afraid of being, again, called a racist,
01:55:58 like fired, ostracized amongst their peers.
01:56:01 And so it did require it to get to a bad enough place
01:56:06 for me to finally say, you know what?
01:56:07 I just, I feel like I have to do this.
01:56:10 Live through the short term attacks of the press,
01:56:12 which ultimately was very freeing for me
01:56:14 because now I don’t really care.
01:56:16 And now I can actually just build the company
01:56:18 that I want to build without caring about that.
01:56:21 And then what was cool was a lot of really great people
01:56:24 reached out to the Coinbase too after that.
01:56:25 And were like, I’m an early engineer at Google or wherever.
01:56:29 And this culture has gotten kind of messed up
01:56:33 and I want to work at a company
01:56:34 that’s willing to stand for that.
01:56:35 And so we’ve gotten a lot of good people come over.
01:56:37 Basically what I realized, and by the way,
01:56:38 our diversity numbers and all that stuff,
01:56:40 people told me when I was drafting this poster,
01:56:43 don’t post this, people, underrepresented groups
01:56:46 will never want to work at this company again.
01:56:47 And I was like, I don’t think that’s true.
01:56:49 I talked to our ERG groups and they’re not telling me
01:56:53 they care about this stuff that much.
01:56:54 They’re telling me they just want to be respected at work
01:56:57 and do good work and contribute.
01:56:58 So my gut was telling me that that advice was wrong.
01:57:01 And I can tell you a year after doing it,
01:57:05 our diversity numbers are basically either the same
01:57:07 or better in every category.
01:57:08 So that turned out to be false.
01:57:12 Look, I hate to be polarizing on either dimension here.
01:57:17 I just want to get good work done
01:57:18 and build good stuff with technology.
01:57:20 So I think companies should just have reasonable policies.
01:57:25 You want to get rid of bias in hiring.
01:57:27 You want to attract great people from all
01:57:29 different backgrounds.
01:57:31 We have pledge 1%.
01:57:32 We put 1% of the company equity into a foundation.
01:57:35 I hope we’re able to do good stuff with that.
01:57:36 Let’s give back in some way.
01:57:39 But the main message I guess for me is the core mission,
01:57:46 the core work that we’re doing on economic freedom
01:57:48 and just all of our products,
01:57:49 that is the main value that we’re contributing in the world.
01:57:52 Let’s just do that more.
01:57:53 And hopefully we can get from 89 million verified users
01:57:56 to a billion or whatever.
01:57:58 And then I just think that’s how we’ll have
01:58:01 the biggest impact.
01:58:02 It’s tempting though.
01:58:03 It’s so interesting how companies get tempted to help.
01:58:07 And you step in and it’s almost like a drug
01:58:10 and then you can’t, you forget.
01:58:11 I mean, like all of us in life just have to be companies.
01:58:14 You get distracted and maintaining focus.
01:58:18 You’re absolutely right.
01:58:19 The way for Coinbase to add value to the world
01:58:22 is to maximize the mission that it’s on,
01:58:25 not other stuff.
01:58:27 And when you get wealthier and more successful,
01:58:29 it becomes more and more tempting
01:58:31 to just help out in some other shallow ways.
01:58:35 It’s fascinating.
01:58:36 And you just kind of brought that to light.
01:58:37 So it was very refreshing.
01:58:38 And it shouldn’t be controversial
01:58:40 to sort of focus on just getting stuff done.
01:58:43 Well, let me ask you,
01:58:44 I mean, do you think that this,
01:58:46 it’s all these things tie together.
01:58:47 There’s like a general trend of like more censorship.
01:58:50 There’s like more cancel culture.
01:58:52 There’s some of these like freedom values
01:58:57 are kind of, even like freezing people’s accounts,
01:59:00 like the trucker thing that happened.
01:59:02 And this seems like there’s a general trend
01:59:05 of more authoritarian policies there.
01:59:10 But do you feel like the tide is turning on that?
01:59:13 Like there’s counter examples to it we’ve seen recently.
01:59:17 I think it’s the last gasp of old way of doing things.
01:59:20 And so there’s desperation and so on.
01:59:22 Because to be fair, it’s kind of the internet,
01:59:27 which is where’s the source of a lot of this,
01:59:29 where people have a voice,
01:59:31 is making the power centers of the world really nervous.
01:59:34 And so that’s where that’s coming from, I think.
01:59:36 And the internet is tricky.
01:59:38 It’s weird.
01:59:39 It’s full of bots.
01:59:41 It’s full of like misinformation of all kinds,
01:59:45 full of large groups with conspiracy theories and so on.
01:59:49 And I mean misinformation broadly.
01:59:51 People are misusing the word misinformation.
01:59:53 They’re just, governments are just labeling
01:59:56 random things with misinformation just to censor them.
01:59:59 But I just think it’s just like a new world
02:00:03 where the internet is really finally taking hold,
02:00:06 where there’s billions of devices
02:00:07 and everybody has a voice.
02:00:09 It’s almost, basically governments and powerful people
02:00:15 are slightly losing hold of power.
02:00:18 And they’re starting to freak out a little bit.
02:00:20 That’s it.
02:00:21 And once you have young people that are coming up now,
02:00:25 gain power, I think we’ll rebalance everything.
02:00:28 And then there’s, like you said,
02:00:30 promising signs that it’s obvious
02:00:34 that the majority of people want freedom.
02:00:38 And that means a lot of things.
02:00:39 That means economic freedom.
02:00:40 That means freedom to have a voice,
02:00:44 freedom to move around,
02:00:45 freedom to act in the way they,
02:00:47 without reasonable sort of limitations
02:00:53 by people that don’t have their best interests.
02:00:55 And I gain more hope from just regular people
02:00:59 that are fighting and like demanding
02:01:05 being able to have freedom of speech,
02:01:08 or more specifically sort of resisting
02:01:12 crude overreach of government in the acts of censorship,
02:01:16 at least in the United States.
02:01:19 And hopefully that percolates out to the rest of the world
02:01:22 that’s struggling on a much more basic level
02:01:25 where people are being put in prison for the words they say,
02:01:27 not just banned from Twitter.
02:01:30 Right, it could be worse.
02:01:31 What are some lessons from your failures and your successes
02:01:37 about what it takes to run a company?
02:01:40 I think one of the things that I learned about leadership
02:01:43 is that I never really thought of myself
02:01:47 as a very natural leader, to be honest.
02:01:48 I don’t think I was a natural leader.
02:01:51 But so I always envisioned good leaders
02:01:54 as like these military generals,
02:01:55 like they seem so confident and they’re just like bark orders,
02:01:58 charge that hill and do this.
02:02:00 And I was actually like more introverted
02:02:03 and kind of, I wasn’t really confident
02:02:06 in the way I communicated.
02:02:09 And so what I realized is that
02:02:11 there’s lots of different kinds of leaders.
02:02:13 You can be any kind of CEO you want, right?
02:02:15 I was kind of more of like a product, technical focus CEO.
02:02:18 And I preferred to sort of hear everyone’s opinion.
02:02:21 And it wasn’t just gonna like render a decision in the room
02:02:23 in some like kind of heated moment
02:02:25 and like piss off half the people.
02:02:26 I would do like, all right, I’m gonna go think about it
02:02:28 and I’ll send you my decision later today
02:02:30 or tomorrow or whatever.
02:02:32 And so I found ways to kind of make it work for me
02:02:35 where I could basically, I always tried to avoid like,
02:02:40 when people getting like super emotional about something
02:02:42 and like, I think they’re thinking,
02:02:44 their judgment goes down, right?
02:02:46 And just like never make a decision when you’re angry, right?
02:02:48 And so I would always sort of try to get a sense of,
02:02:50 are these people like trying to be right
02:02:52 or are they trying to seek the truth?
02:02:54 And you can do these little tricks like,
02:02:57 okay, you argue that person’s position
02:02:59 and you argue the other one
02:03:00 and like see if you can genuinely represent it.
02:03:02 Now I know you’re listening and these kinds of things.
02:03:06 But I guess, sorry,
02:03:07 getting back to your question about leadership,
02:03:08 I think I basically just kept doing things
02:03:12 that were a little outside my comfort zone.
02:03:15 And then my comfort zone kept getting bigger and bigger.
02:03:17 You know?
02:03:18 And so I think that’s how you build confidence
02:03:22 is you do the thing that’s scary
02:03:24 and it’s like a little outside.
02:03:26 And like when I first started Coinbase,
02:03:29 I had never managed anybody.
02:03:30 I would have been scared to death
02:03:32 to have put out like a very controversial opinion like that
02:03:34 and sort of, all right, 5% of people will go,
02:03:38 we didn’t know what percent it was gonna be by the way.
02:03:39 It could have been 1%, it could have been 50%.
02:03:41 Like, but we went into it scary
02:03:44 because it was a scary thing.
02:03:45 I was like, I don’t know, I think this is right.
02:03:47 I’m just gonna do it.
02:03:49 So if you do enough scary things,
02:03:50 like you’ll build the confidence.
02:03:52 And I feel like I’m still on that journey.
02:03:54 Every year or two at Coinbase,
02:03:57 there’s some big thing that comes out as like,
02:03:58 oh my God, like I didn’t sleep well for a week
02:04:00 and like, this is the next level, right?
02:04:03 But that’s how you learn and grow.
02:04:05 So you’re still going up that mountain
02:04:07 through the fog one step at a time.
02:04:09 Yeah.
02:04:10 Can I just quickly ask you about a couple of other efforts
02:04:13 that are super interesting that you’re involved with?
02:04:15 So first of all, a little bit more old school,
02:04:18 fascinating effort of research hub.
02:04:22 So what’s that about the GitHub for open science?
02:04:26 Yeah, okay, so basically I’ve had a chance
02:04:28 to try to help a couple other companies
02:04:30 get off the ground too,
02:04:30 cause I wanna see various efforts out there succeed.
02:04:34 And one of them I’ve always thought about
02:04:37 like why is scientific research
02:04:39 not more like open source software
02:04:41 or why couldn’t it be much faster, right?
02:04:42 And there’s, you’ve probably have seen this
02:04:44 like in an academic setting, right?
02:04:46 But there’s all kinds of things that feel very antiquated
02:04:48 to me about scientific research,
02:04:50 everything from the funding process and grants
02:04:53 to how peer review works, to how you submit to journals,
02:04:57 all the costs associated with journals,
02:05:00 you know, that the people,
02:05:01 you’d think like you’d get paid for this or something
02:05:02 and it would then be available to all the taxpayers for free
02:05:05 but no, they’re like, they’re all pay walled
02:05:06 and there’s like these big companies
02:05:08 that have sort of, in my view,
02:05:09 kind of held back innovation here.
02:05:12 So, and the preprint servers like bioarchive
02:05:14 and archive.org have really helped this
02:05:16 but those websites are,
02:05:17 they look like they’re kind of from like 15 years ago
02:05:19 or something.
02:05:20 Yeah, it’s like Craigslist or something.
02:05:21 Yeah, so anyway, one of the things I,
02:05:24 once Coinbase went public last year,
02:05:26 I had a little bit of liquidity and I was like,
02:05:27 all right, let me fund a small team
02:05:28 and let’s see if we can,
02:05:30 if they can like go off and make something better here.
02:05:32 So we have a prototype out there,
02:05:35 it’s at researchhub.com, people can check it out.
02:05:37 And it’s basically, you know,
02:05:39 the first version is kind of like Reddit for science.
02:05:41 There’s like various hubs, which are like journals,
02:05:44 but you know, you can publish papers there,
02:05:46 you can use an electronic lab notebook
02:05:48 to sort of have a modern day paper,
02:05:49 which is not just a PDF that’s static,
02:05:51 but it’s a living document.
02:05:53 Ideally in the future, you know,
02:05:54 you can get comments and feedback from people in there,
02:05:56 you can update it over time.
02:05:57 We want people to be able to share the code
02:06:00 and the data sets associated with their paper,
02:06:02 research paper is not just a PDF.
02:06:05 And in the future, we want to make it even where like,
02:06:07 you know, people can get funding for science
02:06:09 through that site and even license out innovations
02:06:13 that they’ve made.
02:06:14 Because the other thing I’ve noticed in life
02:06:16 is that there’s kind of like,
02:06:17 there’s a bunch of people working on science
02:06:19 and there’s a bunch of people building companies
02:06:21 and they very rarely intersect,
02:06:23 but when they do, you get the best things
02:06:25 like SpaceX and Genentech and even Google
02:06:28 and like even Coinbase was based on a research paper,
02:06:31 the Bitcoin white paper.
02:06:32 And so most business people are like creating companies
02:06:35 that don’t have any scientific innovation,
02:06:36 they’re just like marketing based on, you know, whatever.
02:06:40 And then a lot of scientists are making things
02:06:42 which never actually benefit humanity
02:06:44 because they’re not commercialized and turned into products.
02:06:47 And so if we can somehow create a translation layer
02:06:50 between those two groups and help them,
02:06:53 you know, helps align the market forces,
02:06:56 align scientific research to market forces
02:06:58 so that they’re more incentivized.
02:06:59 Like if you discover CRISPR or something like that,
02:07:01 like you should be a billionaire, you know,
02:07:03 and like all the downstream implications of that,
02:07:05 not going through some antiquated tech transfer office
02:07:07 or whatever.
02:07:08 And if you’re an entrepreneur,
02:07:11 you should be looking to commercialize
02:07:12 the latest scientific innovations.
02:07:14 And so that’s kind of like the longterm vision
02:07:17 for that site.
02:07:18 I think it’s just an early step today,
02:07:20 but we’ve got like a really passionate community on there
02:07:22 that are jumping into like, you know,
02:07:24 computer science or longevity or various bio hubs
02:07:29 or whatever and like beginning to source
02:07:31 the best innovations, but also discuss them, improve them
02:07:34 and publish through the site.
02:07:36 So I have a question about incentives,
02:07:38 but first let me say for people listening
02:07:39 who are outside of academia might not be familiar
02:07:42 with an absurd situation.
02:07:44 So there’s journals, like you mentioned,
02:07:47 and scientists publishing those journals
02:07:51 and the journals provide very little value
02:07:56 except matching you with reviewers that are unpaid.
02:08:00 And so in the digital world,
02:08:05 they’re providing basically almost no value
02:08:07 except hosting your paper.
02:08:10 And they put up a paywall and charge people to access that.
02:08:15 And that charge is not like even Netflix fees,
02:08:18 you’re talking about a lot of money.
02:08:20 So they’re basically blocking your research
02:08:24 that should be wide open from the world
02:08:27 and creating a paywall.
02:08:28 It’s a fascinating like scam that’s actually holding back.
02:08:32 I don’t, it’s a shitty scam
02:08:34 because you’re not making that much money.
02:08:37 I feel like a definition of a scam,
02:08:38 you should at least be making money.
02:08:40 So like significant amount of money,
02:08:42 you’re basically making shady money
02:08:44 and holding back all of human knowledge, okay.
02:08:46 So that put aside and people get a little confused
02:08:49 because the journals aren’t the ones paying the scientists.
02:08:53 People think like the journals are somehow
02:08:55 funding the scientists, therefore they have the right
02:08:59 to put up a paywall.
02:09:01 No, no, no, the funding is coming from elsewhere.
02:09:03 Journals are the middleman that nobody asks for,
02:09:07 especially in the digital world.
02:09:08 Anyway, that said, there is a interesting kind of incentives
02:09:13 for scientists, which is prestige and so on.
02:09:16 So there’s a thing with journals,
02:09:20 if there’s a prestigious journal
02:09:22 and you pass the review process, you get into that journal
02:09:26 or a prestigious conference in computer science,
02:09:29 then that’s seen as a good thing in your resume.
02:09:33 And, oh, not just your resume, within your community,
02:09:36 that’s a respected thing.
02:09:37 Is there some way to achieve that same kind of incentive
02:09:40 in the open setting of research hub?
02:09:44 So like where I could say, I got X, Y and Z,
02:09:49 like, look, I’m impressive
02:09:50 because this happened on research hub.
02:09:52 I think you’re right.
02:09:53 Like the whole academia, like progress track
02:09:56 is about like where you got published
02:09:58 and how many citations.
02:09:59 And it’s kind of like a false economy of reputation
02:10:04 because like, there’s not real money backing it.
02:10:06 And so I think we’ve thought about this a little bit.
02:10:10 And I think the research hub team has an opportunity
02:10:12 to do something here that basically says like,
02:10:14 okay, I had the top paper for 2022
02:10:18 in biology on in here.
02:10:21 And you basically publish a list,
02:10:23 a leaderboards of these like top for the month,
02:10:26 the year in all these different categories.
02:10:29 Then actually, we should probably give out grants
02:10:31 and awards in addition to that,
02:10:34 fund those people almost like fellows
02:10:36 or even give out like, you know how like the Nobel prize,
02:10:40 there should be like a research hub prize or something
02:10:42 and like ship people,
02:10:43 maybe even ship like a print version of a journal
02:10:47 that is the top papers in each category
02:10:50 in each month or whatever.
02:10:51 And then like people want to put that in their wall
02:10:53 and in the lab.
02:10:53 And like, so I do think we need to sort of change,
02:10:57 I don’t know, like the traditional folks in academia
02:10:59 or science would probably think this is like crazy idea.
02:11:02 But I think we need to change the culture
02:11:04 to not celebrate getting published in paywall journals,
02:11:09 almost like friends don’t let friends publish
02:11:11 in like paywall journals.
02:11:14 Like, cause that’s, it’s just not helping humanity.
02:11:16 So like, you know, it should be more prestigious
02:11:19 to publish in an open science way and get the top spot.
02:11:23 That should be celebrated above being published
02:11:25 in whatever, I don’t even want to name one of them,
02:11:27 you know?
02:11:28 Well, there’s currently,
02:11:30 the culture has already shifted
02:11:31 to where almost everybody publishes on archive
02:11:33 and by archive and so on.
02:11:34 Yeah.
02:11:36 But, so that the culture is there on that scene,
02:11:39 friends don’t let friends not publish open,
02:11:42 but then the prestige thing is missing,
02:11:44 which is like anyone can publish an archive.
02:11:48 So how do you know it’s actually a strong paper?
02:11:50 Now, funny enough, even with the crappy systems we have now,
02:11:55 word of mouth is powerful.
02:11:56 Like you have a, like citation system is pretty powerful.
02:12:00 So like you say, okay, this is a strong paper.
02:12:02 We don’t need reviewers, our human eyes are the reviewers,
02:12:06 like the community is the reviewers.
02:12:08 So it’s already, like that part is there,
02:12:11 but it would be nice to have like, you know,
02:12:15 nature level, like this is respect,
02:12:18 this is a respectful accomplishment.
02:12:21 Yeah.
02:12:21 And something like a leaderboard,
02:12:23 but a stable kind of system.
02:12:25 Yeah.
02:12:26 And I should mention too,
02:12:27 so there’s a crypto angle to this too,
02:12:29 which is, so research hub has a coin associated
02:12:31 with research coin.
02:12:32 And it’s basically, if people, you know,
02:12:34 upvote your paper or like support it,
02:12:37 you’ll accumulate more research coin,
02:12:38 which is basically like rep or like a reward token.
02:12:42 And so that is a way to, I guess,
02:12:45 measure the community’s collective view of that paper,
02:12:49 a form of peer review.
02:12:51 And it can even be weighted by like the reputation
02:12:53 of the people voting on it and that sort of thing over time.
02:12:57 Yeah, I think the last thing I’ll just say is that,
02:12:59 so I think from a rep, like a prestige point of view,
02:13:03 it won’t start off that way.
02:13:05 It’ll probably start off like being a little more quirky,
02:13:07 like, you know, like remember when YouTube first started,
02:13:10 it was like people posting weird cat videos and stuff.
02:13:13 And, but now like, you know,
02:13:14 if you have a million subscribers on YouTube,
02:13:16 that’s probably better than getting like a TV show on NBC
02:13:18 or whoever the traditional gatekeeper was.
02:13:21 So my hope, it might take 10 years, 20 years, whatever,
02:13:23 but I’m hoping that this can sort of be the new
02:13:27 prestigious way that young people publish in science
02:13:30 and it’ll come to be viewed as more prestigious.
02:13:32 The journals, the traditional journals
02:13:34 will be viewed as old fashioned.
02:13:36 Well, it’s definitely a system that could do a lot better.
02:13:41 And there’s a lot of incredible, brilliant people
02:13:43 doing science, they deserve better, the better platforms.
02:13:47 So another thing you’re taking on and helping out with
02:13:50 is this new limit, which is looking at longevity.
02:13:53 What’s the idea there?
02:13:55 Yeah, okay, so as you can see, I’m excited about science.
02:13:58 Like I think, you know, science is sort of the,
02:14:01 basically if you get scientific innovation,
02:14:03 then you get better products and you get better
02:14:06 economic growth and then you get all kinds of like surplus
02:14:09 in society that can go to arts and philosophy
02:14:12 and like all kinds of stuff.
02:14:13 But with new limits, so yeah, I kind of got,
02:14:17 I started hosting some dinners with scientists last year
02:14:21 and I was learning about all kinds of the latest stuff
02:14:23 happening in bio and there’s a lot of really cool stuff
02:14:26 happening with like CAR T cells and CRISPR
02:14:28 and all these things.
02:14:29 And anyway, one of the topics I started to learn more about
02:14:32 was something called cell reprogramming.
02:14:35 And, you know, people maybe have heard of this
02:14:38 induced pluripotent stem cells where you could take
02:14:40 like a skin cell and turn it back into a stem cell.
02:14:43 And Shinya Yamanaka won the Nobel prize for this work
02:14:46 that was done in 2006.
02:14:49 And, you know, it’s kind of a crazy thing.
02:14:51 You can turn one cell into another type of cell.
02:14:54 Well, people recently have been experimenting
02:14:58 with different types of transcription factors
02:15:01 that would either not,
02:15:02 you don’t want the cell to go all the way back
02:15:04 to being a stem cell.
02:15:05 You can end up getting like cancerous cells
02:15:07 and things like that.
02:15:08 But you want it basically the cell to revert
02:15:10 a little bit earlier in its, you know,
02:15:13 it would call it the Waddington landscape,
02:15:15 but it’s basically like go, become act,
02:15:17 start to act like a bit of a younger cell,
02:15:19 but not to de differentiate and become more like a stem cell.
02:15:23 And so I decided this might be an interesting area
02:15:25 to go fund.
02:15:27 I think that that team has come together.
02:15:28 There’s like some really talented people
02:15:30 who’ve come together to help get that off the ground.
02:15:32 And they’re basically building a platform
02:15:36 that can test a lot of different transcription factors
02:15:38 on different cell types and hopefully find ways
02:15:41 to rejuvenate different types of cells and tissues
02:15:44 to extend human health span.
02:15:45 I mean, the moonshot goal here, you know,
02:15:47 the get to Mars is that there could be some therapy here
02:15:51 that in, I don’t know, 10 or 20 years that you take
02:15:54 and from a whole body point of view
02:15:56 is sort of rejuvenating tissue,
02:15:58 not just one type of tissue like your immune system,
02:16:00 but eventually your whole body, maybe even your brain
02:16:02 so that, you know, we don’t have that issue
02:16:04 where people who are older have trouble learning
02:16:06 or they’re more ossified in their thinking.
02:16:10 To me, this is just, I always think about, you know,
02:16:13 it’s actually a little inspired by Elon, right?
02:16:15 Is like, what are some of the biggest things in the world
02:16:18 like that are probably high technology risk,
02:16:20 but if they did work,
02:16:21 maybe they’re kind of low chance of working,
02:16:23 but if they did work would have enormous impact.
02:16:26 I like the idea of trying hard tech problems,
02:16:28 especially for people like founders like me
02:16:30 who’ve made some money in software,
02:16:32 which I think we’re in kind of like a golden age of software
02:16:34 so there’s like fortunes to be made,
02:16:36 but if you do make some money in that,
02:16:38 my hope is people will like do atoms, not bits, you know,
02:16:42 and try some of the harder things like in biotech
02:16:45 or, you know, I guess he’s doing cars and rockets and stuff,
02:16:48 but anyway, I think we should try hard tech
02:16:52 or, you know, physical science problems as well
02:16:54 and see if that can advance for team human.
02:16:58 Yeah, so he’s also doing bio with Neuralink
02:17:02 and I feel like bio is tough because it’s messy.
02:17:07 We don’t understand it as well.
02:17:08 We don’t understand it.
02:17:09 The risk is higher in terms of, not the risk is higher,
02:17:14 but like you have to deal with the actual sort of,
02:17:18 to get to human, to get to stuff
02:17:21 where it could be therapies for actual human bodies
02:17:24 is tricky because you have to prove that it’s safe,
02:17:29 it’s effective, all those kinds of things with FDA.
02:17:33 I mean, it’s just, it’s tricky.
02:17:34 It’s very difficult.
02:17:36 It’s a long journey.
02:17:38 I mean.
02:17:39 If I can give a quick plug.
02:17:41 So yeah, I’m on the board at New Limit.
02:17:43 We’re hiring talented scientists
02:17:45 that are interested in the cellular programming space.
02:17:47 They don’t necessarily have to be coming
02:17:48 from like an aging background or anything like that.
02:17:50 There’s sort of a small group of people doing even.
02:17:53 So this is a new thing?
02:17:54 This is a, is New Limit relatively new?
02:17:56 Yeah, it’s very new.
02:17:57 There’s a small team today, just a handful of people.
02:18:00 And so we’re hiring more there.
02:18:03 If people are excited about that space, reach out.
02:18:05 And same thing for Research Hub.
02:18:07 There’s a small team there that’s really awesome.
02:18:10 That’s doing more like software engineering,
02:18:12 design, product, that kind of stuff.
02:18:15 What advice would you give?
02:18:16 If you put on your old, wise, sage hat,
02:18:21 what advice would you give to young people today?
02:18:24 High school, maybe undergrad and college about life.
02:18:29 So like career, having a career they can be proud of,
02:18:34 or maybe a life they can be proud of.
02:18:37 So people can do whatever they want to be happy, right?
02:18:40 So there’s not one way to do it.
02:18:42 I do think that some people,
02:18:44 a particular type of people out there,
02:18:46 a lot of people actually,
02:18:47 they want to have an impact on the world.
02:18:48 That’s how they get a sense of fulfillment, right?
02:18:50 So I mean, you need to have like health, physical health.
02:18:53 You need to have good relationships,
02:18:55 like there’s lots of things.
02:18:56 But most people want to do something important.
02:18:58 They want to have fulfilling work,
02:18:59 a way that they can feel like they’re contributing.
02:19:02 I think a lot of people, young people today are thinking
02:19:05 like I should be an activist or something like that.
02:19:09 And there’s people in the world who have power
02:19:11 and a lot of people who don’t, I don’t have power.
02:19:13 And so the way to change the world is to speak truth
02:19:18 to power or like criticize power
02:19:20 and try to pressure them to change.
02:19:25 To me, I don’t think that’s the right way
02:19:27 to actually have an impact on the world
02:19:28 because everybody has probably,
02:19:33 I think people have more power than they realize.
02:19:36 And by the way, it’s easy to be a critic.
02:19:39 It’s hard to actually change these things and fix it.
02:19:42 And so you’ll get a lot of accolades
02:19:44 from friends and things like that
02:19:46 if you kind of go around criticizing, it’s easy to do.
02:19:48 Like everything is broken and could be better,
02:19:51 including stuff I’m working on.
02:19:53 I find like so frustrating.
02:19:56 There’s a million things I want to be better about
02:19:57 like what we’re doing in Coinbase.
02:20:01 So be the person in the arena,
02:20:04 like that Theodore Roosevelt quote,
02:20:05 I think he said it right.
02:20:06 Like go chew glass and stare into the abyss.
02:20:10 Like if you really want to have an impact,
02:20:11 either join a company that has a mission
02:20:14 that is trying to fix the thing you’re passionate about
02:20:16 or start that company if it doesn’t exist
02:20:18 or start a charity if it’s not suitable
02:20:21 to be a company or whatever it is,
02:20:23 but go try to be a part of the solution.
02:20:25 Don’t just criticize or be a part of the problem.
02:20:30 My hope is that more people can realize
02:20:37 that they actually can have a meaningful impact that way.
02:20:39 And I think that to me,
02:20:41 technology is actually one of the most important ways
02:20:44 to improve the world.
02:20:45 Like if you look at climate change,
02:20:49 like a lot of the best ideas like carbon sequestration,
02:20:51 all these things, it’s a technology thing, right?
02:20:53 If you want to try to fix education,
02:20:55 it’s like look at like Khan Academy
02:20:57 and all this stuff going online, right?
02:20:59 If you want to fix, you know, whatever transportation
02:21:02 and like the financial system and global freedom
02:21:06 and like equality of all these things,
02:21:07 like there’s typically the way to get something changed
02:21:11 in the world today is with technology.
02:21:13 And so I do think people, it’s very bizarre to me
02:21:15 that there’s this kind of like anti tech thing going on.
02:21:19 Look, nothing is perfect.
02:21:20 Like if you create something new
02:21:21 and like tens of millions of people use it
02:21:23 or billions of people use it,
02:21:24 it’s like there’s going to be some bad people
02:21:26 who use it too, okay?
02:21:27 And there’s, you know, society is complicated,
02:21:29 but like I think most of these things have been net positive
02:21:33 because most people in the world are good
02:21:34 is at least my view.
02:21:36 So yes, we can mitigate like the 1% of bad people
02:21:39 trying to abuse something,
02:21:41 but 99% of people in the world are good.
02:21:42 And the way you can improve the world is with technology,
02:21:45 joining companies, starting companies
02:21:46 that are working on the right stuff.
02:21:48 So I hope more young people do that.
02:21:50 And just, if you’re not sure what to do,
02:21:53 like just get started with anything.
02:21:54 That’s how you learn.
02:21:55 And basically have the optimism
02:21:57 that you have the power to do the change.
02:22:00 So it’s easy to distract yourself by being the critic.
02:22:06 That’s almost like acknowledging to yourself
02:22:08 that that’s all you can be,
02:22:09 but basically everybody has the power to be the fixer.
02:22:16 I like, chew glass and look into the abyss.
02:22:21 That’s much more fun than it sounds.
02:22:25 What do you think is the meaning of this whole thing?
02:22:27 Why are we here?
02:22:29 Life.
02:22:29 Yep, what’s the meaning of life?
02:22:31 What’s this existence we got?
02:22:34 You’re trying to increase the amount of economic freedom
02:22:36 on this planet or trying to alleviate
02:22:38 some of the suffering.
02:22:39 Yeah.
02:22:40 But why?
02:22:41 I don’t really think there is any point to life.
02:22:46 You know, somebody once told me,
02:22:50 you know, if you go into these like,
02:22:51 kind of really big existential questions,
02:22:54 it can get a little scary
02:22:55 because like you stare off the cliff
02:22:58 and there’s like, there’s nothing there.
02:22:59 You know, this one person told me one time they were like,
02:23:03 you know, Brian, you should probably snorkel, don’t scuba.
02:23:08 I guess, and I think they were trying to say like,
02:23:11 I, some of my friends have done this, right?
02:23:13 They’ll go to like, you know, epic meditation retreats
02:23:16 and like, they’ll kind of come back
02:23:19 with all this existential dread of like,
02:23:21 what’s the meaning of it all.
02:23:22 And then like, as far as I can tell,
02:23:24 we are just some organic molecules in the ocean
02:23:27 started like dividing and replicating
02:23:30 and the selfish gene and all this stuff,
02:23:32 like basically ended up here.
02:23:34 And our only, it’s some kind of like really naive algorithm
02:23:38 that’s just kind of trying to get us
02:23:39 to survive and replicate.
02:23:40 And we have DNA just like every other animal.
02:23:43 And so we happened to develop
02:23:45 these like really cool neocortexes.
02:23:46 And so now we’re sort of self aware
02:23:48 and we have all these big questions
02:23:51 and maybe we’ll create another, you know,
02:23:54 as computers get better,
02:23:55 we’ll create the simulation inside our thing.
02:23:57 And I think it’s cool.
02:23:58 Like we should basically,
02:23:59 I just want to keep watching the movie, you know, unfold.
02:24:02 That’s part of why I want to work on,
02:24:04 like New Limit is really cool.
02:24:05 Cause it’s helped, if people can live longer,
02:24:07 whether that’s uploading their brain to the cloud
02:24:10 or, you know, basically through we get biology to work
02:24:14 or the strong AI to work or whatever.
02:24:17 One of those two hopefully works out.
02:24:18 And then we get to keep watching the movie
02:24:20 and see how it all unfolds.
02:24:22 I think that’s fun.
02:24:23 And so I don’t know if that’s like an answer,
02:24:25 but I guess I don’t think there’s any real purpose.
02:24:27 So just try to have fun.
02:24:28 Well, the cool thing is that we get to write the movie
02:24:32 as we watch it.
02:24:34 Yeah, that’s exactly right.
02:24:36 I mean, that’s like the Steve Jobs quote and all that,
02:24:38 where he’s like, everything around you was invented
02:24:40 by somebody who just was like,
02:24:42 this was a crazy idea they thought up.
02:24:43 So once you realize you can kind of do anything you want,
02:24:51 then that’s what you start to go,
02:24:53 you start to go try crazier stuff.
02:24:55 I mean, this is another one of those areas where,
02:24:57 not to get too out there,
02:24:58 but like, you know, when you’re,
02:25:00 I think you can build your comfort zone
02:25:02 around like people being upset with you.
02:25:03 You can also build your range
02:25:06 of what you think is possible, right?
02:25:08 Like when I was in my 20s,
02:25:10 I was like reading all these books
02:25:12 about like self improvement and goal,
02:25:13 how to write down your goals and stuff.
02:25:15 And my goals were like,
02:25:17 someday I wanna make $100,000 a year or something like,
02:25:21 and that was, and you know,
02:25:25 and it seemed like a little outlandish or what,
02:25:28 I wrote down these goals,
02:25:28 like I wanna own rental property or something anyway.
02:25:31 And then I slowly started to get some of these things done
02:25:35 over a couple of years.
02:25:35 And so I started to think a little bigger.
02:25:38 I remember one time I wrote down this goal where I was like,
02:25:41 what’s the craziest thing I could think of?
02:25:42 And I was like, what if I, I wanna write,
02:25:44 I wanna start a billion dollar tech company.
02:25:47 That’s crazy.
02:25:48 And I had never started like a million dollar tech company
02:25:50 or any tech company really.
02:25:52 So what business did I have writing that goal down?
02:25:54 I remember I wrote that on a piece of paper like,
02:25:58 like probably every day for a year or something almost,
02:26:00 right?
02:26:01 I don’t know if it was every day,
02:26:02 but like I wrote it down a lot.
02:26:03 And so little things started to happen.
02:26:06 I was like, all right,
02:26:07 well, maybe I should move back to the Bay area
02:26:09 from Buenos Aires.
02:26:10 Maybe I should try to apply to Y Combinator or whatever.
02:26:13 Like, and I started thinking about these ideas.
02:26:15 And so whatever it gets you fired up,
02:26:16 it doesn’t have to be like some company goal
02:26:18 or startup thing.
02:26:19 It could be anything, right?
02:26:21 Maybe you wanna publish a book
02:26:22 or like do something creatively or whatever.
02:26:25 Anyway, I think like within seven years, no,
02:26:32 it’s probably more like 10 years
02:26:33 of me writing that goal down.
02:26:36 Coinbase had a valuation over a billion dollars.
02:26:38 So it was out of my realm of what was even possible.
02:26:42 And then within 10 years,
02:26:44 you can accomplish more in 10 years than you think,
02:26:46 less in a year than you think.
02:26:48 So now I’m like, okay, what’s the next goal?
02:26:51 What’s the, okay, maybe I wanna get a billion people
02:26:55 accessing the open financial system
02:26:57 through our products every day.
02:27:00 That would be cool for humanity.
02:27:01 And that’s a pretty crazy goal.
02:27:03 Like there’s only 8 billion people or something, right?
02:27:05 So there’s one out of eight.
02:27:07 Or maybe I can radically,
02:27:09 like if I make some like the right investments or whatever,
02:27:12 I can like help radically extend human health span
02:27:16 or whatever, right?
02:27:18 So try crazier stuff.
02:27:21 I don’t know, even if it doesn’t work,
02:27:22 like hopefully you’ll advance the state of affairs,
02:27:27 like something interesting will happen.
02:27:29 And so most people today,
02:27:31 they look at people trying this stuff and they’re like,
02:27:33 oh my God, they’re so, they’re a genius or whatever.
02:27:35 And it’s like, or they’re an idiot.
02:27:37 Like one of the two, neither one are true.
02:27:39 It’s just like anybody can start
02:27:42 by thinking about what they want and then like go for it.
02:27:45 And then once you get that,
02:27:46 like go for something a little bigger
02:27:47 and like you just have fun with it.
02:27:48 And the universe is a way of smiling and helping you out
02:27:53 if you just write it down and you dream big.
02:27:57 There’s something about just karma,
02:27:59 about the energy you put into this world.
02:28:03 Other people will help you out, doors will open.
02:28:05 You’ll notice that the doors opened
02:28:07 and you actually have a shot at making it happen.
02:28:10 It’s a funny world.
02:28:12 Yeah, I mean, I don’t really subscribe
02:28:14 to all like the woo woo interpretations of this,
02:28:16 but my very rational brain interpretation of it
02:28:18 is that if you just wake up every day
02:28:20 and write down like what you want to get done
02:28:22 and towards your longer goals, your larger goals,
02:28:24 it’s just on your mind that day.
02:28:26 So you start to notice opportunities
02:28:28 and you think about it more.
02:28:29 So Brian, thank you for dreaming big.
02:28:32 Thank you for doing what you’re doing,
02:28:33 doing incredible engineering at scale,
02:28:37 trying to help people from all over the world
02:28:39 and actually helping me personally get more into crypto
02:28:43 just cause it’s so easy.
02:28:46 So thank you so much.
02:28:48 And thank you so much
02:28:49 for giving your extremely valuable time today
02:28:51 to this awesome conversation.
02:28:53 Thanks for your awesome podcast.
02:28:55 I love it and I listen to it often.
02:28:57 Thanks for listening to this conversation
02:28:59 with Brian Armstrong.
02:29:00 To support this podcast,
02:29:01 please check out our sponsors in the description.
02:29:04 And now let me leave you with some words
02:29:06 from Benjamin Franklin.
02:29:08 An investment in knowledge pays the best interest.
02:29:13 Thank you for listening and hope to see you next time.